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Question: Suppose the exchange rate between the Mexican peso and the U.S. dollar is 12 MXN = $1 and the exchange rate between the Hungarian forint and the U.S. dollar is 215 FNT = $1.
a. Express both of these exchange rates in terms of dollars per unit of the foreign currency.
b. What should the exchange rate be between the Mexican peso and the Hungarian forint? Express the exchange rate in terms of 1 peso and in terms of 1 forint.
c. Suppose the exchange rate between the peso and the dollar changes to 9 MXN = $1 and the exchange rate between the forint and the dollar changes to 240 FNT = $1. For each of the three currencies, explain whether the currency has appreciated or depreciated against the other two currencies.
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