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21-01-2024
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Suppose that in the free market, where the supply of the foreign currency is equal to demand for that currency, the peso-dollar exchange rate is 4 pesos = $1. Assume the central bank sets an official exchange rate at 3 pesos = $1, we can say that in the official market the dollar is
A) overvalued.
B) undervalued.
C) appreciated.
D) None of the above.

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