Question

US policymakers' decisions to bring down the value of the country's exchange rate, say from US$ 1 = 21 Mexican Peso today to US$1 = 19 Mexican Peso, would tend to ____ the value of exports to Mexico; thus, ____ the value of GDP in the United States.

reduce ; reducing

increase ; reducing

increase ; increasing

reduce ; increasing

cannot be assessed based on information provided

Answer 1

Question- US policymakers' decisions to bring down the value of the country's exchange rate, say from US$ 1 = 21 Mexican Peso today to US$1 = 19 Mexican Peso, would tend to ____ the value of exports to Mexico; thus, ____ the value of GDP in the United States.

Anwer- increase ; increasing.

As because now dollar values less comparatively to earlier value of dallar,now mexico will import more form US as now they have to pay less Mexican Peso for 1$ and as Exports from US to Mexico will increase it will increase the GDP of the US.