The u.s. exchange rate rises. as a result there is a
If the exchange rate between the U.S. dollar and the Mexican peso is $0.057 = 1 peso, approximately how many pesos would a Mexican buyer pay for the computer? 23,853 pesos The answer is: "When the official price of a currency is lowered." Aside from factors such as interest rates and inflation, the currency exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. A floating exchange rate occurs when the government doesn’t intervene but allows the value of the currency to be determined by market forces. Fixed Exchange Rate This occurs when the government intervenes to try and keep the value of the currency at a certain level against other currencies.