Suppose the Inflation Rate in Canada Is 1 Percent and the Inflation

Suppose the inflation rate in Canada is 1 percent and the inflation rate in Mexico is 3 percent.If the nominal exchange rate in terms of Mexican pesos per Canadian dollar falls by 4 percent, by how much will the real exchange rate (in terms of Mexican goods per Canadian good) change?

A) +6 percent
B) +2 percent
C) −2 percent
D) −6 percent