Assume That the Total Value of Investment Transactions Between United

question 60

Multiple Choice

Assume that the total value of investment transactions between United States and Mexico is minimal. Also assume that the total dollar value of trade transactions between these two countries is very large. Now assume that Mexico's inflation has suddenly increased, and Mexican interest rates have suddenly increased. Overall, this would put ____ pressure on the value of Mexican peso. The inflation effect should be ____ pronounced than the interest rate effect.​

• A) ​downward; more
• B) ​upward; more
• C) ​downward; less
• D) ​upward; less

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Definitions:

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