The actual exchange rate of the real, Brazil's currency, is 2.50 real per U.S. dollar. According to the latest PPP estimations, the real is undervalued by 40 percent. This implies that the PPP exchange rate is:
A) 1.20 real per dollar.
B) 1.40 real per dollar.
C) 1.50 real per dollar.
D) 2.00 real per dollar.
Correct Answer:
Verified
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