1 Explain what it means for a currency to be overvalued or undervalued 2 Explain why an overvalued dollar is bad 3 Explain how central banks can maintain a fixed exchange rate when a currency is overvalued 4 List the options for dealing with a persistently overvalued currency

Question: 1. Explain what it means for a currency to be overvalued or undervalued. 2. Explain why an overvalued dollar is bad. 3. Explain how central

1. Explain what it means for a currency to be overvalued or undervalued.
2. Explain why an overvalued dollar is bad.
3. Explain how central banks can maintain a fixed when a currency is overvalued.
4. List the options for dealing with a persistently overvalued currency.

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