If the foreign currency equivalent of the domestic price of a commodity is less than the foreign price of the same commodity, then the LOP implies that:

Name: If the foreign currency equivalent of the domestic price of a commodity is less than the foreign price of the same commodity, then the LOP implies that:
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Question

Quizplus · Accepted Answer

The LOP implies that the foreign currency is overvalued because the domestic price of the commodity is lower than the foreign price when converted to the foreign currency.

If the Foreign Currency Equivalent of the Domestic Price of a Commodity