You can buy certain supplies in the European Union or in South Africa. For the moment, ignore other factors that can affect price. Would it be cheaper to buy your supplies in the European Union or in South Africa? Write a complete paragraph to explain your answer.
If you are going to buy a similar product that was produced in South Africa or the European Union, it will be cheaper to buy it in South Africa for two central reasons. The first is the dollar price in relation to the currencies prevailing in South Africa and Europe. The Euro, in force in Europe, is a currency valued against the dollar, while the South African currency is the Rand, which is devalued against the dollar. This makes purchasing power in dollars greater in Africa than in Europe. The second factor is related to production inputs. In South Africa, the cost of labor is lower because wages are lower than in Europe, which lowers the output of African products relative to European products.
