The implied PPP rate of exchange of Mexican pesos per U.S.dollar is 8.58 according to the Big Mac Index. The current exchange rate is Peso 10.8/$1. Thus,according to PPP and the Law of One Price,at the current exchange rate the peso is ________.
A) overvalued
B) undervalued
C) correctly valued
D) not enough information to answer this question
Correct Answer:
Verified
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