The Following Question Are Based on the Following Graph, Showing

question 27

Multiple Choice

The following question are based on the following graph, showing the market for pesos. Mexico and the United States are engaged in a system of flexible exchange rates.

-If people in Mexico decide to purchase shares of stock on the U.S.stock exchange,the exchange rate (in terms of the dollar to the peso)

• A) rises because demand increases.
• B) falls because demand increases.
• C) falls because demand decreases.
• D) rises because demand decreases.
• E) falls because supply increases.

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