You are given the following information: Quantity of exports 600 Domestic currency price of exports 15 Exchange
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Question:
You are given the following information:
Quantity of exports 600
Domestic currency price of exports 15
Exchange rate (d/f) 1.25
i. Calculate the domestic and foreign currency currency values of exports.
ii. What will happen if the exchange rate falls to 1.10, assuming that the value of the elasticity of demand for exports is -0.2? Provide your final answers to 2 decimal points.
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