The increase in capital inflows into Mexico due to the real appreciation of the peso resulted in:
A) an increase in current account deficits.
B) an increase in current account surpluses.
C) an increase in capital account deficits.
D) none of the above.

Question

Quizplus · Accepted Answer

The real appreciation of the peso makes Mexican goods more expensive for foreign buyers, reducing exports and increasing imports, leading to a current account deficit.

The Increase in Capital Inflows into Mexico Due to the Real