Question: 1. Suppose there is a small decrease in the income level in Mexico and a large decrease in the U.S. income level. Everything else equal,

1. Suppose there is a small decrease in the income level in Mexico and a large decrease in the U.S. income level. Everything else equal, what is likely to happen to value of the MXN?

2. The USD depreciates 5% versus the JPY. The USD appreciates 1% versus the MXN. What is the approximate appreciation or depreciation we might see in the JPY/MXN cross exchange rate?

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