Suppose the real exchange rate of 10 Mexican pesos to the dollar moves to 9 pesos to the dollar.The dollar has __________________,making American goods __________ expensive for Mexicans.
A) appreciated; less
B) appreciated; more
C) depreciated; less
D) depreciated; more

Question

Quizplus · Accepted Answer

The dollar has depreciated because it now exchanges for fewer pesos (from 10 to 9), making American goods less expensive for Mexicans.

Suppose the Real Exchange Rate of 10 Mexican Pesos to the Dollar