Question
12. If the exchange rate between the Mexican Peso and the U.S.$ is 3 Pesos=1$. If this rate changed to 2 Pesos=1$. (a) Are the
12. If the exchange rate between the Mexican Peso and the U.S.$ is 3 Pesos=1$. If this rate changed to 2 Pesos=1$. (a) Are the Mexican exports cheaper or more expensive due to this change?
(b) What can the Mexican policy makers do to return to the initial exchange rate?
(c) Are the American exports cheaper or more expensive due to this change?
(d) What can the American policy makers do to return to the initial exchange rate?
If the exchange rate between the Mexican Peso and the U.S.$ is 3 Pesos=1$. If this rate changed to 4 Pesos=1$. (e) Are the Mexican exports cheaper or more expensive due to this change?
(f) What can the Mexican policy makers do to return to the initial exchange rate?
(g) Are the American exports cheaper or more expensive due to this change?
(h) What can the American policy makers do to return to the initial exchange rate?
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