Suppose You Put $1,000 Aside for a Vacation in Mexico

Multiple Choice

Suppose you put $1,000 aside for a vacation in Mexico. On your flight to Cancun, the passenger seated next to you says: "Did you hear the good news? We can do and buy more on our vaction now." You ponder the comment and say to yourself:

A) "I bet there's a new tariff on American goods."
B) "I bet there's a new tariff on Mexican goods."
C) "Perhaps the exchange rate, dollars per peso, increased."
D) "Perhaps the exchange rate, pesos per dollar, increased."
E) "Perhaps the exchange rate, pesos per dollar, decreased."