In the foreign exchange market between the Mexican peso and the U.S. dollar, an excess supply of Mexican pesos will result in a depreciation of the Mexican peso relative to the U.S. dollar.

Question

Quizplus · Accepted Answer

An excess supply of Mexican pesos means there are more pesos available for exchange than there is demand for them. This decreased demand causes the value of the Mexican peso to decrease and therefore depreciate relative to the U.S. dollar.

In the Foreign Exchange Market Between the Mexican Peso and the U.S