Multiple Choice
The diagram below represents the market for loanable funds and the market for foreign-currency exchange in Mexico. Use the diagram to answer the following questions.Figure 19-7 
-Refer to Figure 19-7. Which of the following is consistent with capital flight from Mexico?
A) The real exchange rate of the peso appreciates from E0 to E1.
B) The real exchange rate of the peso depreciates from E0 to E1.
C) The real exchange rate of the peso appreciates from E1 to E0.
D) The real exchange rate of the peso depreciates from E1 to E0.
Correct Answer:
Verified
Correct Answer:
Verified
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