Consider Figure 20.6 below, which shows the nominal exchange rate (EXR) and the purchasing power parity real exchange rate (RER) between the Mexican peso and U.S. dollar, index for pesos per dollar, and the same for the Japanese yen-U.S. dollar exchange rates. Discuss whether the peso and yen are "correctly" valued (i.e., not over- or undervalued). Which currency appears to be better valued? Explain.Figure 20.6: Mexican and Japanese Nominal (EXR) and Real Exchange (RER) Rates 
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