question archive ON NOVEMBER 17, 2015, THE PRESIDENT OF THE UNITED STATES OF AMERICA, BARRACK HUSSEIN OBAMA ANNOUNCED THAT THE EXCHANGE RATE BETWEEN European COUNTRIES AND USA WILL MOVE FROM THE MARKET EQUILIBRIUM PRICE OF $1

ON NOVEMBER 17, 2015, THE PRESIDENT OF THE UNITED STATES OF AMERICA, BARRACK HUSSEIN OBAMA ANNOUNCED THAT THE EXCHANGE RATE BETWEEN European COUNTRIES AND USA WILL MOVE FROM THE MARKET EQUILIBRIUM PRICE OF $1

Subject:EconomicsPrice:2.86 Bought3

ON NOVEMBER 17, 2015, THE PRESIDENT OF THE UNITED STATES OF AMERICA, BARRACK HUSSEIN OBAMA ANNOUNCED THAT THE EXCHANGE RATE BETWEEN European COUNTRIES AND USA WILL MOVE FROM THE MARKET EQUILIBRIUM PRICE OF $1.00 = 7 EURO TO $1.00  = 15 EURO. THE REASON HE STATED IS TO DISCOURAGE THE EUROPEANS FROM COMING TO THE USA. THIS SEEN AS :

A. APPRECATION OF A DOLLAR

B. DEPRECIATION OF A DOLLAR

C. DEPRECIATION OF EURO

D. OVERAALUATION OF A DOLLAR

E. NONE THE ABOVE

 

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Choice d is the correct answer

In this case, the dollar is overvalued. People from would require more Euros to acquire one dollar. In other words, the value of the currency is too high for the current state of the economy.