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Premier cigarettes are produced in Kenya and USA. It sells for USD 22 in the USA and Ksh. 34 in Kenya. According to the theory
- Premier cigarettes are produced in Kenya and USA. It sells for USD 22 in the USA and Ksh. 34 in Kenya.
- According to the theory of PPP, what should be the US dollar/Ksh. Spot exchange rate (1 marks)
- Suppose the price of cigarettes is expected to rise to $ 27 over the next year, while its price in Kenya is expected to rise to Ksh. 44. What should be the one year forward US dollar /Ksh exchange rate be? (2 marks)
- Economic unions like the EAC, are bound to face several challenges unless certain tenets of regional economic integration are addressed right from the inception stage. Discuss
(17 marks)
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N. Hyman
9th Edition
0324537190, 9780324537192
