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In late 1984, what evidence was there that the dollar might have been overvalued in the...

In late 1984, what evidence was there that the dollar might have been overvalued in the united states?
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In late 1984, the dollar might have been overvalued in the united states because of below mentioned reasons:

  • Trade deficit of the united states in late 1984 was large.
  • Still dollar value was not weakening because of slow economic growth in developed countries of Europe.
  • At that time united states and European countries were contributing majority of economic groth of the world and European developed countries were having slow growth so dollar was not weakening inspite of having negative balance of trade (trade deficit scenario)
  • The US interst rates were falling inspite of high inflation which was a kind of contradictory move which was strengthening the dollar.

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