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If we set the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S.

If we set the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S. dollar has risen to a value of 112.6, then from a competitive perspective the U.S. dollar is:

a

overvalued.

b

undervalued.

c

very competitive.

d

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