A-LevelEconomicsInternational economic issues9708/12 · May/June 2013 · Q241 Mark

The exchange rate of the Mexican peso against the US$ changed from 10 pesos = 1 US$ to 9 pesos = 1 US. During the same period, the general price level in Mexico fell by 10% while the US price level remained unchanged. What happened to the nominal and real exchange rate of the peso against the US? [Table with columns: nominal peso exchange rate, real peso exchange rate]

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

Aappreciated appreciated

Bappreciated unchanged

Cdepreciated depreciated

Ddepreciated unchanged

✓ Correct answer

B: appreciated unchanged

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Topic: International economic issues, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source: A-Level Economics, May/June 2013 Paper 1 Variant 2, question 24.

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