Suppose the exchange rate between Mexican pesos and Canadian dollars is 8 pesos per dollar.If the exchange rate goes to 10 pesos per dollar,what will happen to the exports of Canadian goods into Mexico?

Question

Quizplus · Accepted Answer

As the exchange rate increases to 10 pesos per dollar, the Canadian dollar has become more expensive relative to the Mexican peso. This means that Canadian goods are now more expensive for Mexican buyers, making them less attractive and leading to a decrease in Canadian exports to Mexico. Therefore, the exports of Canadian goods into Mexico will tend to fall.

Suppose the Exchange Rate Between Mexican Pesos and Canadian Dollars