An appreciation of Mexico's peso

Question

Quizplus · Accepted Answer

When the appreciation of Mexico's peso occurs, it means that the value of the currency is increasing compared to other currencies such as the US dollar. As a result, Mexican goods become relatively more expensive for foreign buyers, leading to a decrease in Mexican exports. On the other hand, Mexican imports become relatively cheaper for domestic buyers, resulting in an increase in Mexican imports. Therefore, the appreciation of Mexico's peso increases Mexican imports and decreases Mexican exports.

An Appreciation of Mexico's Peso