4 Suppose that the exchange rate between the United States and Mexico freely fluctuated in the open market. Indicate which of the following would cause the dollar to appreciate (or depreciate) relative to the peso.

(a) An increase in the quantity of drilling equipment purchased in the United States by Pemex, the Mexican oil company, as a result of a Mexican oil discovery

(b) An increase in the U.S. purchase of crude oil from Mexico as a result of the development of Mexican oil fields

(c) Higher interest rates in Mexico, inducing U.S. citizens to move their financial investments from U.S. to Mexican banks

(d) Lower interest rates in the United States, inducing Mexican investors to borrow dollars and then exchange them for pesos

(e) Inflation in the United States and stable prices in Mexico

(f) Ten percent inflation in both the United States and Mexico

(g) An economic boom in Mexico, inducing Mexicans to buy more U.S.-made automobiles, trucks, electric appliances, and television sets

(h) Attractive investment opportunities, inducing U.S. investors to buy stock in Mexican firms