Which of the following would cause a decrease in the demand for Mexican pesos by those holding U.S. dollars?
A) An increase in the rate of return on investments in Mexico that is above the rate of return on investments in the U.S.
B) Inflation in the U.S. but not in Mexico.
C) Inflation in Mexico but not in the U.S.
D) Mexican goods become widely fashionable in the U.S.
Correct Answer:
Verified
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