Suppose that the exchange rate between Mexican pesos and dollars is 8 pesos per dollar. If the exchange rate goes to 6 pesos per dollar, it would tend to:

Question

Quizplus · Accepted Answer

When the exchange rate changes from 8 pesos per dollar to 6 pesos per dollar, the dollar has depreciated relative to the peso. This makes U.S. goods cheaper for Mexican consumers, likely increasing U.S. exports to Mexico.

Suppose That the Exchange Rate Between Mexican Pesos and Dollars