Exhibit 18-6 -Imagine There Are Only Two Countries in the World,Mexico and in the World,Mexico

question 150

Multiple Choice

Exhibit 18-6

-Imagine there are only two countries in the world,Mexico and Canada,and two currencies,pesos and Canadian dollars.If Mexico's central bank wants to protect its currency from depreciating in response to the demand shift shown in Exhibit 18-6,which of the following is most likely to be the policy it will choose?

• A) increasing the supply of pesos
• B) decreasing the supply of Canadian dollars
• C) purchasing Canadian dollars with newly issued pesos
• D) purchasing pesos with reserves of Canadian dollars
• E) selling pesos to Canadians

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Definitions:

Locomotive Ability

The capability to move or travel from one place to another, often used in reference to motor skills development in children.

Motor Ability

The capacity to perform movements and tasks involving muscle activity, ranging from gross (large muscle groups) to fine (small muscle groups) motor skills.

Simple Reflex

A basic, involuntary response to a stimulus that involves a simple neural pathway.

Secondary Circular Reaction

A developmental phase in infants characterized by repetitive actions aimed at reproducing desirable outcomes, crucial for cognitive development.