Final answer:
Purchasing Power Parity (PPP) calculations can reveal a country's currency to be undervalued, but do not indicate why.
Step-by-step explanation:
Purchasing Power Parity (PPP) calculations can reveal a country's currency to be undervalued, meaning that the currency is worth less in relation to other currencies. However, PPP calculations do not indicate why a currency is undervalued. The reason behind a currency being undervalued can vary and depend on various factors such as differences in inflation rates, market forces, trade imbalances, and government policies. For example, a country with high inflation rates or a weak economy may have an undervalued currency.