wheat; toys

both goods; both goods

Question $9$

$2\mathrm{.}5$ pts

Suppose the U$.$S$.$ dollar depreciates nominally against the Mexican peso by $5\%.$ Assume furthermore that the price level in the United States increases by $7\%,$ with no change in the price level for Mexico. From this we can conclude which of the following?

The price of U$.$S$.$ goods became cheaper relative to goods made in Mexico.

The price of U$.$S$.$ goods became more expensive relative to goods made in Mexico.

There was no change in the real exchange rate.

The real exchange rate for the United States depreciated.

The U$.$S$.$ will export more goods to Mexico.