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A currency is undervalued if its price is less than its PPP value its price exceeds...

A currency is undervalued if

its price is less than its PPP value

its price exceeds its PPP value

its price is the same as its PPP value

inflation is constant

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Answer #1

If we talk in simple terms then if a currency is undervalued with respect to another country currency it means the currency has depreciated

the purchasing power of the the currency also decreases which means its price is less than the PPP

Here PPP is the purchasing power parity which is the relationship betweenexchange rate of one currency with respect to other currency

If inflation is high then currency is under values as well

So the correct answer here is option A

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