Suppose in year 1, the cost of a SA basket of goods is R1,050, the comparable EU basket costs 100 and the nominal exchange rate is R10.50 per euro. If in year 2, the cost of the SA basket of goods rises to R1,250, the EU basket costs 110 while the nominal exchange rate remains at R10.50 per euro, then the real rand/euro exchange rate is: ________ and measured in real terms, the rand has: __________ against the euro?

(a) 0.924 European basket per SA basket; appreciated.

(b) 1.082 European basket per SA basket ; depreciated.

(c) 0.924 SA basket per European basket; appreciated.

(d) 1.082 SA basket per European basket; depreciated. (

e) 1 SA basket per European basket ; remained unchanged