Economics: Principles, Problems, and Policies, 19th Edition

by McConnell, Campbell R.; Brue, Stanley L.; Flynn, Sean M.

Published by McGraw-Hill Education

ISBN 10: 0073511447

ISBN 13: 978-0-07351-144-3

Chapter 38 - The Balance of Payments, Exchange Rates, and Trade Deficits - Questions - Page 799: 7e

Answer

Peso depreciates

Work Step by Step

When U.S. adopts high-interest-rate policy, higher U.S. rates attract capital to dollars, reducing demand for pesos → peso weakens.

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