Suppose that the current exchange rate between the dollar and peso is $1 equals 10 pesos. If the exchange rate changes to $1 equals 8 pesos, which of the following is true?
A) The dollar depreciates and U.S. exports become cheaper.
B) The dollar appreciates and U.S. exports become cheaper.
C) The peso depreciates and imports from Mexico become cheaper.
D) The peso appreciates and imports from Mexico become cheaper.
Correct Answer:
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