Question: Under a flexible exchange rate system, if the equilibrium exchange rate is 0.10 USD = 1 MXN and the current exchange rate is 0.12 USD

Under a flexible system, if the equilibrium is 0.10 USD = 1 MXN and the current is 0.12 USD = 1 MXN, will the U.S. dollar appreciate or depreciate? Explain.

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