After years of smoldering unrest in southern mexico the


Question: After years of smoldering unrest in southern Mexico, the rebels finally mount a full-scale attack on urban areas. Order is eventually restored, but in the meantime capital has fled the country, resulting in a 50% devaluation of the peso. You recall that there were similar devaluations in 1982, when the US economy was in a lengthy recession, and in 1995, when real growth in the US economy slowed down to 1% before rebounding. Based on this previous information, would you expect this devaluation to reduce real growth in the US? What other economic indicators would you check before making this determination?

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Microeconomics: After years of smoldering unrest in southern mexico the
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