Question

An increase in Mexico’s demand for United States goods would cause the value of the dollar to

A) appreciate because Mexico would be selling more United States dollars.
B) appreciate because the price level in the United States would increase.
C) depreciate because the United States would be buying more Mexican pesos.
D) appreciate because Mexico would be purchasing more United States dollars.

Answer 1

D) appreciate because Mexico would be purchasing more United States dollars.

Step-by-step explanation:

When the Mexico's demand for united states Goods increased, it means The amount of people who need a dollar currency to obtain those goods are also increased (since Most payment of Goods made by US companies will be made in dollar)

This create a situation which make the Current Holder of United States dollar able to sell their currency with Higher Price without losing any of the demand. Due to this increase in power, we can say that the United States' currency has appreciated over Mexico's currency.