If a currency has appreciated ________ the price differential between two countries as implied by PPP,then a currency is ________.
A) The same as, undervalued
B) The same as, overvalued
C) More than, overvalued
D) Less than, overvalued

Question

Quizplus · Accepted Answer

When a currency has appreciated more than the price differential between two countries as implied by Purchasing Power Parity (PPP), it is considered overvalued. This means it has strengthened beyond what PPP would suggest, making domestic goods more expensive compared to foreign goods.

If a Currency Has Appreciated ________ the Price Differential Between