Question: Assume that Australia trades mostly with two countries only, the United States and the United Kingdom, and that 65% of the trade is conducted with

Assume that Australia trades mostly with two countries only, the United States and the United Kingdom, and that 65% of the trade is conducted with the United States, 30% with the United Kingdom, and 5% with the rest of the world. The exchange rates of the Australian dollar at two points in time, 0 and 1, are as follows:

Exchange Rate Period 0 Period 1
AUD/USD 1.4541 1.7800
AUD/GBP 2.1555 2.5700

Calculate the exchange rate relatives, using Period 0 as a base period, and the base value = 100

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