Answer to Question #158304 in Macroeconomics for Mxolisi

Question

Suppose that gold price rises in south africa. Using a graph, explain how this rise in the gold price will affect the exchange rate between the south african Rand and the US dollar.

Answer 1

The value of South African rand will increase since the exports will be higher and the demand for gold is also high this makes the rand to have an advantage over the dollar.