When a currency is undervalued relative to the dollar,then its exchange rate with respect to the dollar is ________.

Question

Quizplus · Accepted Answer

When a currency is undervalued relative to the dollar, its exchange rate with respect to the dollar is below the equilibrium. This means that the currency can be exchanged for fewer dollars than its fundamental value would suggest, making it cheaper for foreigners to buy goods and services from the country with the undervalued currency. This can stimulate exports and increase economic growth.

When a Currency Is Undervalued Relative to the Dollar,then Its