Assume That the Price Level in the United States and in Mexico

question 146

Multiple Choice

Assume that the price level in the United States and in Mexico is 100 and that the nominal and real exchange rate is 10 pesos per dollar.If the price level in Mexico increases relative to the price level in the United States,then at the same nominal exchange rate

• A)the dollar has experienced a real depreciation.
• B)the peso has experienced a real depreciation.
• C)the real exchange rate between the dollar and the peso is unchanged.
• D)the dollar and the peso have experienced a real appreciation relative to each other.

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