Step 2
 should be completed on the worksheet for parts 
2a
, 
2b
, and 
2d
.   For part 
2c
,
plot the data on a graph (use a spreadsheet program).
Zambian Kwacha for One U.S. Dollar
2500
2000
1500
1000
Kwacha
500
0
1991 1992 1993 1994 1995 1996 1997 1998
Year
In the example presented above there are a few interesting insights that are apparent.  First,
the inflation rate since May 1996
had been steadily declining until mid 1998.  Zambia had
made significant progress on addressing key aspects of their economy that reflects this
progress.  This is especially significant given the lack of donor support for balance of
payments, the large budget deficit, and the large interest payments on the external debt. As a
result of a poor harvest, the inflation rate has begun rising from a low of about 17 percent in
early 1998 to almost 26 percent in July 1998.  The value of the Zambian  Kwacha to the US
dollar has steadily weakened since mid 1991.  There have been periods of stability (e.g., mid
1993 to mid 1994).  The steady weakening of the Kwacha and the continued high inflation
has in conjunction with a stagnation of wages reduced the purchasing power of urban
households.
3.3 Deciding what to monitor
The decision of which markets and commodities to monitor if a function of two main
factors.  The first factor is the food system a country.  The information generated in the
previous section (and the worksheets) is important to include in these decisions.  Another
factor to include is the actual markets and commodities that are included in the price
collection system that provides you with your data.
22
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