Assume That There Is Trade Only Between the U

question 25

Essay

Assume that there is trade only between the U.S. and Mexico. In addition, there is a floating exchange rate. Explain what would happen in the case of an excess demand for pesos. Explain what would happen in the case of an excess supply of pesos.

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Definitions:

Rare Coins

Unique and uncommon coins that are sought after by collectors due to their historical, numismatic, or investment value.

Preexisting Duty Rule

A legal principle stating that performing a duty one is already legally obligated to perform does not constitute valid consideration for a new contract.

Unforeseen Difficulties

Challenges or complications that could not have been predicted or expected, often affecting the execution of plans or projects.

Past Consideration

A concept in contract law that refers to an act or benefit given prior to the promise being made, which therefore does not constitute valid consideration for a contract.