When Mexico's exchange rate depreciated dramatically in 1994,
A) American exports to Mexico increased
B) American exports to Mexico declined
C) Mexican tourism to the U.S. increased
D) American tourism to Mexico decreased
E) Mexicans received more dollars for their peso

Question

Quizplus · Accepted Answer

When Mexico's exchange rate depreciated dramatically, it meant that the Mexican peso lost value against the U.S. dollar. This made American goods more expensive for Mexicans, leading to a decline in American exports to Mexico.

When Mexico's Exchange Rate Depreciated Dramatically in 1994