Injections to the circular flow model include saving, taxes, exports, and investment.

If the U.S. inflation rate falls relative to the Mexican inflation rate, which of the following will happen in the market for pesos?

a. A rightward shift of the demand curve, a leftward shift of the supply curve, and an appreciation of the peso b. A leftward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the peso c. A leftward shift of the demand curve, a leftward shift of the supply curve, and a depreciation of the peso d. A rightward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the peso e. A leftward shift of the demand curve, a rightward shift of the supply curve, and a depreciation of the peso.

A reduction in a country's rate of inflation should

A) increase its imports. B) increase its exports. C) lead to a negative trade balance. D) lead to an outflow of SDRs.