Suppose that two countries, Vietnam andCôte d’Ivoire, produce coffee. The currencyunit used in Vietnam is the dong (VND).Côte d’Ivoire is a member of CommunauteFinanciere Africaine (CFA), a currency unionof West African countries that use theCFA franc (XOF). In Vietnam, coffee sellsfor 5,000 dong (VND) per pound. The ex-change rate is 30 VND per 1 CFA franc,EVND / XOF = 30.a. If the law of one price holds, what is theprice of coffee in Côte d’Ivoire, measured inCFA francs?b. Assume the price of coffee in Côte d’Ivoireis actually 160 CFA francs per pound of cof-fee. Compute the relative price of coffee inCôte d’Ivoire versus Vietnam. Where willcoffee traders buy coffee? Where will theysell coffee in this case? How will these trans-actions affect the price of coffee in Vietnam?In Côte d’Ivoire?

Assume the price of coffee in Côte d’Ivoireis actually 160 CFA francs per pound of cof-fee. Compute the relative price of coffee inCôte d’Ivoire versus Vietnam. Where willcoffee traders buy coffee? Where will theysell coffee in this case? How will these trans-actions affect the price of coffee in Vietnam?In Côte d’Ivoire?

Two countries trade with each other regularly. Country A has a strong economy and buys large quantities of natural resources from country B each year. Country B has a weaker economy, and $1 in country A's currency is worth about $50 in country B's currency.Which result would be most likely if the exchange rate suddenly became $1 in country A's money for $75 in country B's money?A.Country B would receive more value for its exported materials.B.Country A would receive more value for its imported materials.C.Country A would be forced to adopt a flexible exchange rate.D.Country B would be forced to adopt a fixed exchange rate.

Suppose that the price level in the Foreign country remains constant and so does the nominal exchange rate.If the price level in the Home country falls,  _____________Group of answer choicesthe Home currency is undervalued.the Home currency is overvalued.the Home currency has a real appreciation.the Home country will export more to and import less from the Foreign country.

Suppose the current exchange rate is 27.55 Ghanaian Cedis per $1 US dollar and you have 184 Cedis. After a no-fee exchange how much money in US Dollars would you have?(Round your answer to the nearest cent)

Suppose the current exchange rate is 5.74 Ghanaian Cedis per $1 US dollar and you have 161 Cedis. After a no-fee exchange how much money in US Dollars would you have?(Round your answer to the nearest cent)