Which of the following is likely to result in long-run appreciation of the U.S.dollar relative to the peso?
A) relatively high interest rates in Mexico
B) relatively high labor productivity in Mexico
C) tariffs applied by Mexico on computer imports from the United States
D) stronger Mexican preferences for goods produced in the United States

Question

Quizplus · Accepted Answer

Stronger Mexican preferences for goods produced in the United States would increase demand for U.S. dollars to purchase these goods, leading to an appreciation of the U.S. dollar relative to the peso in the long run.

Which of the Following Is Likely to Result in Long-Run