Question

You go on vacation to Mexico and take $1,000 with you. During your time in Mexico, the peso appreciates in value relative to the dollar. It follows that

Answer 1

Answer:

We will be able to purchase fewer goods and services.

Explanation:

Appreciation of a currency in terms of another currency implies an increase in the worth of a currency in terms of another currency.

An appreciation in the value of peso in terms of dollars means that the worth of peso has increased in terms of dollar.

In other words, the worth of dollar in terms of peso has decreased. The value of $1,000 will decline.

So, a tourist in Mexico with $1,000 will be able to buy fewer goods an services.

Answer 2

Answer:

You go on vacation to Mexico and take $1,000 with you. During your time in Mexico, the peso appreciates in value relative to the dollar.

This shows that as Peso appreciates then dollar depreciates, it shows that there would be more money to be spent during the vacation because of the increase in value of peso in mexico

Explanation:

For instance, if $1= 10 peso

$1000= 10,000 peso

if peso appreciates by 5, then

$1=15 peso

$1000= 15,000 peso

the above analogy implies that, there would be more to spend during the vacation as a result of increase in value of peso