Assume That the Fixed Exchange Rate System of 100 Pesos

question 47

Multiple Choice

Assume that the fixed exchange rate system of 100 pesos = 1 dollar is above the equilibrium exchange rate of 90 pesos= 1 dollar in a flexible exchange rate system.Then the dollar would be

• A)undervalued and the peso would be overvalued.
• B)overvalued and the peso would be undervalued.
• C)revalued.
• D)depreciated and the peso would be appreciated.

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Definitions:

Severe Anxiety

A heightened state of anxiety characterized by extreme fear or worry, significantly impacting daily functioning.

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