If Mexico Experienced a Period of Rapid Inflation, Causing Mexicans

question 63

Multiple Choice

If Mexico experienced a period of rapid inflation, causing Mexicans to lose confidence in the peso as a store of value, which of the following would be most likely to occur?

• A) The value of the peso would appreciate on the foreign exchange market.
• B) Foreign currency would be used as a substitute for the peso.
• C) The peso would be used as a store of value in other countries.
• D) Mexicans would save more.
• E) The purchasing power of the peso would increase.

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