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Suppose that Mexico exports 20,000 units of agricultural products to the U.S. at 20 peso per unit, and imports 2,000 units of machinery from the
Suppose that Mexico exports 20,000 units of agricultural products to the U.S. at 20 peso per unit, and imports 2,000 units of machinery from the U.S. priced $12/unit and Peso/$ = Peso 20/$. Then the exchange rate changes to Peso/$ = Peso 15/$ causing the demand for both agricultural product and machinery changes by 5%. As a result of the exchange rate change Mexico's revenue from exporting agricultural product to the U.S. will be _____, and Mexico's cost of importing machinery from the U.S. will be ______. Group of answer choices Peso 420,000; Peso 360,000 Peso 420,000; Peso 342,000 Peso 380,000; Peso 504,000 Peso 380,000; Peso 378,000
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