To know whether the dollar is overvalued,we need to know
A) what foreign currency the dollar is being compared with.
B) the real interest rate in the United States and the real interest rate in whatever country's currency the dollar is being compared with.
C) the equilibrium exchange rate between the dollar and the foreign currency the dollar is being compared with.
D) whether Federal Reserve monetary policy is expansionary or contractionary.
E) There is not enough information to answer the question.
Correct Answer:
Verified
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