In an effort to stimulate the economy, the United States Federal Reserve decides to cut interest rates. The Mexican government does not alter its interest rates, which stand higher than those rates of the United States. What is the likely short-term effect on the value
of each nation's currency?
es
A)
B)
The value of the dollar will appreciate and the value of the peso will
appreciate.
The value of the dollar will appreciate and the value of the peso will
depreciate
The value of the dollar will depreciate and the value of the peso will
depreciate
C)
D)
The value of the dollar will depreciate and the value of the peso will
appreciate