If a country’s freely floating currency is undervalued in terms of pur

If a country’s freely floating currency is undervalued in terms of purchasing power parity, its capital account is likely to be

A) in deficit or tending toward a deficit.
B) in surplus or tending toward a surplus.
C) subsidized by the International Monetary Fund.
D) a candidate for loans from the World Bank.

 

 

ANSWER

Answer: A

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