Monetary Devaluation

MONETARY DEVALUATION Like every other product the coin of a country has a price, which is the exchange type; this represents the quantity of Mexican pesos that are needed to buy an American dollar, and like every other price this one is determined because: a) Because of the offer and demand of dollars, or b) Because of the monetary authorities of the country. The origin of the exchange types comes from the necessity that residents …

…it. TV PESOS EXCHANGE TYPE DOLLARS 2,500.00 $ 7.90 316.45 But what happens if we increase our exchange type proportionally to the rise of prices? In order to do that, we will have to know how many percent it increased in the six months. Well, our product increased 25% in six months, so we would have to increase the exchange type by 25%. This way, our TV will cost the same for foreigners in dollar's terms TV PESOS EXCHANGE TYPE DOLLARS 2,500.00 $ 9.87 253.29