The U.S.demand for pesos would shift to the right if there occurred a(n)
A) change in preferences toward U.S. manufactured goods.
B) increase in the dollar/peso exchange rate.
C) decrease in the U.S. population.
D) increase in the U.S. price level.

Question

Quizplus · Accepted Answer

An increase in the U.S. price level would lead to an increase in the demand for pesos as it would make U.S. goods relatively more expensive, causing a shift towards cheaper imports, including from Mexico.

The USDemand for Pesos Would Shift to the Right If There