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Gnom [1K]
3 years ago
9

Pakistan’s GDP in 2010, using the official exchange rate on 1/1/2010, is equal to $300 billion USD ($300,000,000,000). When 2010

GDP is converted using the PPP-implied exchange rate on 1/1/2010, the USD value of the GDP increases to $500 billion ($500,000,000,000). On 1/1/2010, is the Pakistani Rupee overvalued or undervalued against the USD? Explain your answer.
Business
1 answer:
docker41 [41]3 years ago
5 0

Answer:

Undervalued

Explanation:

The PPP exchange rate is the implicit exchange rate, so that everywhere, one dollar has the same purchasing power. In general, this exchange rate is different from the exchange rate on the market.

Because the same nominal GDP translates to a higher real GDP by using the PPP exchange rate, one Pakistan Rupee must be valued more in terms of U.S. dollars than in contexts of the market exchange rate under the PPP exchange rate. The Pakistan Rupee is therefore worth less than its true value in the economy, i.e., undervalued.

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Answer:

B. allows businesses to operate without much government

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The government's role is mainly regulatory. Buyers and sellers have the freedom to choose what to sell or buy. Profits are a big motivation to do business under the free enterprise system.

3 0
3 years ago
In a task assignment situation, in how many different ways can five jobs be assigned to five machines if each job must be assign
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<span>120
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3 0
3 years ago
Mortagae brokers are the ones who bring the home buyers and the lenders together.<br> True / False.
Alborosie

<u>Answer:</u>

True

<u>Explanation:</u>

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4 years ago
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3 years ago
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Answer:

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