When a currency is described as undervalued, this typically implies:
A) it is undervalued relative to what the describer believes purchasing power parity to be.
B) it is undervalued relative to the exchange rate set by the nation's central bank.
C) the exchange rate is greater than one.
D) the exchange rate is lower than one year previous.

Question

Quizplus · Accepted Answer

When a currency is described as undervalued, it typically implies that it is trading at a lower rate relative to what the describer believes its true value to be based on factors like purchasing power parity.

When a Currency Is Described as Undervalued, This Typically Implies