Respuesta :
Mexican real exchange rate increases if the nominal exchange rate (foreign currency per peso) stays the same but prices increase faster in Mexico than in any other nation. Here option A is the right answer.
The value of one currency will increase as the exchange rate changes, while the value of the other currency will decrease. A currency is considered to have appreciated when its value rises. On the other side, a currency is said to have depreciated when its value falls.
An increase in REER indicates a decline in trade competitiveness since it indicates that exports are becoming more expensive while imports are becoming more affordable.
Growth in demand for a currency causes the demand curve to move to the right, ultimately raising the value of the currency sought and driving up the exchange rate.
To learn more about exchange rates
https://brainly.com/question/14930716
#SPJ4
