Currently we are experiencing significant inflation in the US. Suppose the inflation rate in the US increases relative
Posted: Wed Mar 09, 2022 8:28 am
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.
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.