If the real exchange rate is higher (FX costs more) than the equilibrium exchange rate (calculated according to the Balassa-Samuelson effect), the nation's currency is said to be:
A) undervalued.
B) overvalued.
C) at the proper level.
D) at greater risk for a currency crisis.

Question

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The Answer of If the real exchange rate is higher (FX costs more) than the equilibrium exchange rate (calculated according to the Balassa-Samuelson effect), the nation's currency is said to be:
A) undervalued.
B) overvalued.
C) at the proper level.
D) at greater risk for a currency crisis.

If the Real Exchange Rate Is Higher (FX Costs More)