Suppose that last weekrsquos exchange rate is 125 pesos to, Business Economics

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Suppose that last weekrsquos exchange rate is 125 pesos to

Suppose that last week’s exchange rate is 12.5 pesos to the dollar and this week’s exchange rate is 8 pesos to the dollar.

a. What is the price of a $40 item in pesos?

b. What is the price of a p120 item in dollars?

c. Has the dollar appreciated or depreciated?

d. Show how the changes affect XUS and IMUS and GDPUS.

e. Using the information above, why would a country want to depreciate its currency?

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Business Economics: Suppose that last weekrsquos exchange rate is 125 pesos to

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