Currently we are experiencing significant inflation in the US. Suppose the inflation rate in the US increases relative

[answerhappygod]

Currently we are experiencing significant inflation in the US.
Suppose the inflation rate in the US increases relative to
Mexico. We would predict that:
The exchange rate of Dollars/Peso would rise and the equilibrium
amount of Pesos would rise.
The exchange rate of Dollars/Peso would fall and the equilibrium
amount of Pesos would rise.
The exchange rate of Dollars/Peso would fall and the equilibrium
amount of Pesos would fall.
The exchange rate of Dollars/Peso would rise and the equilibrium
amount of Pesos would rise, fall or stay the same.