Question

Suppose that Mexico experienced a very severe period of inflation in 1972. As prices in Mexico rose, the demand in the foreign exchange market for Mexican pesos:

Answer 1

decreased and the supply of them increased, which led to a depreciation of the Mexican peso relative to the rest of the world's currencies

Step-by-step explanation:

Answer 2

demand for pesos would fall and supply would rise. their value would decrease as a result

Step-by-step explanation:

Inflation is a persistent rise in general price level.

When there is high inflation in a country, the demand for the currency would fall because the value of the currency is low. this fall in demand coupled with the excess supply of the currency would lead to a fall in the value of the currency.