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Pakistani rupee overvalued or undervalued against the usd

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Reference no: EM132288642

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 the same GDP is converted to dollars 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.

Reference no: EM132288642

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