If the inflation rate in the United States is higher than that in Mexico and productivity is growing at a slower rate in the United States than in Mexico, then, in the long run, ________, everything else held constant
A) the Mexican peso will appreciate relative to the U.S. dollar
B) the Mexican peso will depreciate relative to the U.S. dollar
C) the Mexican peso will either appreciate, depreciate, or remain constant relative to the U.S. dollar
D) there will be no effect on the Mexican peso relative to the U.S. dollar
A
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When consumers shift away from relatively higher price goods and services in favor of those that are less expensive, this is known as the
A) principle of utility. B) principle of substitution. C) principle of supply. D) principle of increasing opportunity costs.
As the market price of a service increases, more potential sellers will decide to perform that service because:
A. more potential sellers will find that the market price exceeds their reservation price. B. higher prices result in higher revenue. C. it's more prestigious to produce high-priced services. D. higher prices lead to lower opportunity costs.