(14 points total) Suppose Mexico currently has an annual domestic inflation rate of 20% and dollar prices in the US are generally rising at 3% per year. (Assume throughout that PPP holds.) a. At the inflation levels given above, by how much is the peso likely to appreciate/depreciate against the dollar over the long term? (4 points) b. Suppose that Mexico wants to stabilize the floating market exchange-rate value of its currency (dollars/peso) - that is, no appreciation or depreciation over time. What must the rate of inflation of domestic peso prices come down to? (4 points) C. If Mexican real GDP is growing 6% per year, what rate of money growth should the Mexican government try to achieve? (6 points) (14 points total) Suppose Mexico currently has an annual domestic inflation rate of 20% and dollar prices in the US are generally rising at 3% per year. (Assume throughout that PPP holds.) a. At the inflation levels given above, by how much is the peso likely to appreciate/depreciate against the dollar over the long term? (4 points) b. Suppose that Mexico wants to stabilize the floating market exchange-rate value of its currency (dollars/peso) - that is, no appreciation or depreciation over time. What must the rate of inflation of domestic peso prices come down to? (4 points) C. If Mexican real GDP is growing 6% per year, what rate of money growth should the Mexican government try to achieve? (6 points)