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There are two currencies: the peso and the dollar. If there is a fixed exchange rate system and 1 peso is set at 10 cents,

There are two currencies: the peso and the dollar. If there is a fixed exchange rate system and 1 peso is set at 10 cents, then if the equilibrium exchange rate is 1 peso 12 cents, it follows that ______. a. the peso is overvalued b. a surplus of pesos exists c. a shortage of dollars exists d. the peso is undervalued

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