If Mexico has foreign assets worth $100 billion and no liabilities, a 15% depreciation of the peso will result in a(n):

A) increase in liabilities at home by 100 billion pesos.
B) decrease in assets at home by 150 billion pesos.
C) decrease in overall wealth by 15%.
D) increase in overall wealth.


Ans: D) increase in overall wealth.

Economics

You might also like to view...

Economic growth depends more on technological change than on increases on capital per hour worked

Indicate whether the statement is true or false

Economics

Positive supply shocks can have a tendency to ________ costs of production and ________ the inflation rate

A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease

Economics

Severance taxes do not allow companies to shift any the tax burden to demanders because the supply of natural resources is completely inelastic

a. True b. False

Economics

Which of these questions does aggregate demand help us answer?

I. What determines the total amount of our output that individuals, firms, governments and foreigners want to buy? II. What is the economy's long-run real Gross Domestic Product (GDP)? III. What determines the economy's equilibrium price level and the rate of inflation? A) I only B) I and II C) II and III D) I and III

Economics