Suppose That the U

Multiple Choice

Suppose that the U.S. dollar depreciates nominally against the Mexican peso by 5%. The price level in the United States increases by 7%, but Mexico's price level does not change. From this we can conclude that:

A) U.S. goods became cheaper relative to Mexican goods.
B) U.S. goods became more expensive relative to Mexican goods.
C) there was no change in the real exchange rate.
D) the real exchange rate for the United States depreciated.