Question: Explain how the following events would affect the market for the Mexican peso, assuming a floating exchange rate. a. Improvements in Mexican production technology yield

Explain how the following events would affect the market for the Mexican peso, assuming a floating exchange rate.
a. Improvements in Mexican production technology yield superior guitars, and many musicians around the world buy these guitars.
b. Perceptions of political instability surrounding regular elections in Mexico make international investors nervous about future business prospects in Mexico.

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