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The graph below shows the spot exchange rate of the U.S. Dollar per one British Pound (thin line), as well as the presumed equilibrium exchange
The graph below shows the spot exchange rate of the U.S. Dollar per one British Pound (thin line), as well as the presumed equilibrium exchange rate (thick line) According to the presumed (implied) equilibrium exchange rate, which of the below statements is correct? 3.50 3.00 2.50 W 2.00 1.50 1.00 Jan-Jan-Jan-Jan-Jan Jan-Jan Jan Jan. JanJan-Jan-Jan-Jan- 70 73 76 79 82 85 88 91 94 97 00 03 06 09 U.S.S/British Pound CPI Rolling Equilibrium The British Pound was undervalued in 2007 The US Dollar was overvalued in 1985 The U.S. Dollar was overvalued in 1980 The US Dollar was overvalued in 2007 None of the answers are correct
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