Suppose Mexico and the United States were the only two countries in the world.There exists an excess supply of pesos on the foreign exchange market.This suggests that

Question

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An excess supply of pesos on the foreign exchange market indicates that there is a higher demand for dollars in Mexico than there is for pesos in the U.S., which implies that Mexico's current account is in deficit. This is because Mexico is exporting more than it is importing, meaning that it is receiving more U.S. dollars than it needs to pay for U.S. imports, leading to an excess supply of pesos.

Suppose Mexico and the United States Were the Only Two