Chapter 7 - Assignment 3: Mexico's Balance of Payments

Read the above discussion of the economic trends and outlook for the Mexican economy.

  1. How has NAFTA affected the volume of Mexico's trade with the U.S.?
  2. According to this report, why did Mexico begin running a trade deficit in 1988?
  3. Why would a devaluation of the currency reduce a trade deficit?
  4. Explain why an economic recovery in Mexico would lead to a reduction in Mexico's trade surplus.
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