Question

If we set the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S. dollar has risen to a value of 112.6, then from a competitive perspective the U.S. dollar is:______A) overvaluedB) undervaluedC) very competitiveD) there is not enough information to answer this question

Answer 1

Answer:

A. Overvalued

Explanation:

An overvalued currency are basically that currency is too high for that country, and the country will relatively expensive and imports far cheaper.