Q: Suppose that Mexico experienced a very severe period of inflation in 1972. As prices in...
Q: Suppose that Mexico experienced a very severe period of inflation in 1972. As prices in Mexico rose, the demand in the foreign exchange market for Mexican pesos:
A. fell and the supply of them also fell, increasing their value.
B. rose and the supply of Mexican pesos fell, decreasing their value.
C. decreased and the supply of them increased, which led to a depreciation of the Mexican peso relative to the rest of the world's currencies
D. rose and the supply of them also rose, which led to a depreciation of the Mexican peso relative to the rest of the world's currencies
Homework Answers
"C"
As the inflation in Mexico is high that will lead to mexican importing more goods from the world market that will increase the demand for other currency and reduce the demand for local currency and decrease its exchange rate leading to depreciation.
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Q: Suppose that Mexico experienced a very severe period
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tricky. Can anyone help me. This was the only way I can post it. It
starts from where it says IT STARTS HERE.
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for anything. I been struggling with 2 days and its really
confusing. Its only one queshtion but has 2 parts I need to shift
the curves in the graph and answer the question down but its really
tricky. Can anyone help me. This was the only way I can post it. It
starts from where it says IT STARTS HERE.
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