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O 7.) Suppose that the Exchange rate between the US$ and the Mexican peso changes from 0.0475/peso to 0.0525/peso over the year. This implies that
O 7.) Suppose that the Exchange rate between the US$ and the Mexican peso changes from 0.0475/peso to 0.0525/peso over the year. This implies that A) both currencies appreciated. B) both currencies depreciated. the dollar appreciated while the peso depreciated. D) the dollar depreciated while the peso appreciated. E) the currencies are unaffected as it was just the nominal exchange rate that changed. 8.) Holding all else constant, the change in the exchange rate in the previous question implies that A) US imports from Mexico are cheaper, leading to an increase in imports in the US. B) US exports to Mexico are cheaper, leading to an increase in exports from the US. C) US imports from Mexico are more expensive, leading to a decrease in imports in the US. US exports to Mexico are more expensive, leading to a decrease in exports to Mexico. E) Both B and C above F) Both A and D above D)
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