Suppose the exchange rate between the U.S.and Argentina is initially set at 20 pesos per dollar and increases to 25 pesos per dollar.In the U.S.economy this would be expected to

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When the exchange rate increases from 20 pesos per dollar to 25 pesos per dollar, the U.S. dollar has appreciated relative to the Argentine peso. This makes U.S. goods more expensive for Argentine consumers, leading to a decrease in U.S. exports. Conversely, Argentine goods become cheaper for U.S. consumers, leading to an increase in U.S. imports from Argentina.

Suppose the Exchange Rate Between the U