Assuming a flexible exchange-rate system,what would happen to the value of the Canadian dollar and the Mexican peso if Canadian interest rates increase while Mexican rates remain the same?

Question

Quizplus · Accepted Answer

When Canadian interest rates increase while Mexican rates remain the same, investors find Canadian dollar-denominated assets more attractive, leading to an increased demand for Canadian dollars. This causes the Canadian dollar to appreciate in value relative to the Mexican peso, meaning the price of dollars in terms of the peso would increase.

Assuming a Flexible Exchange-Rate System,what Would Happen to the Value