An exchange rate that has an officially fixed value greater than its fundamental value is called a(n)____________ exchange rate.

Question

Quizplus · Accepted Answer

An exchange rate that has an officially fixed value greater than its fundamental value is considered an overvalued exchange rate. This means that the currency is artificially strong and may not accurately reflect the true economic conditions of the country. This can have negative consequences in terms of exports, as they become more expensive and less competitive on the global market. Ultimately, an overvalued exchange rate can lead to economic imbalances and instability.

An Exchange Rate That Has an Officially Fixed Value Greater