Asked by Amber Koeuth on May 18, 2024
Verified
The decrease in the value of the dollar relative to the Mexican peso
A) increased the dollar price paid and decreased the peso price received for Mexican goods imported into the U.S.
B) decreased both the dollar price paid and the peso price received for Mexican goods imported into the U.S.
C) increased both the dollar price paid and the peso price received for Mexican goods imported into the U.S.
D) decreased the dollar price paid and increased the peso price received for Mexican goods imported into the U.S.
Mexican Peso
The Mexican Peso is the official currency of Mexico, represented by the symbol $ or MX$ to distinguish it from other dollar-denominated currencies.
Dollar Value
The worth or purchasing power of the United States dollar in terms of the amount of goods or services that one unit of money can buy.
- Gain insight into the influence of currency valuation changes on a country's export and import price levels.
Verified Answer
JD
Jerulyn DizonMay 24, 2024
Final Answer :
C
Explanation :
When the value of the dollar decreases relative to the Mexican peso, it means that more dollars are needed to buy the same amount of pesos. Therefore, Americans would have to pay more dollars for the same goods imported from Mexico, and Mexican exporters would receive more pesos for the same goods sold to the U.S., assuming the price in pesos does not change.
Learning Objectives
- Gain insight into the influence of currency valuation changes on a country's export and import price levels.