If We Set the Real Effective Exchange Rate Index Between

question 14

Multiple Choice

If we set the real effective exchange rate index between the United Kingdom and the United States equal to 100 in 2010, and find that the U.S. dollar has changed to a value of 91.4, then from a competitive perspective the U.S. dollar is

• A) overvalued.
• B) undervalued.
• C) equally valued.
• D) There is not enough information to answer this question.