Exchange rate fundamentals


Problem:

Please help with the following question.

When US$1 can be converted to more than 12.35 Mexican Peso, does that mean the U.S. economy is stronger, more efficient and more productive than the foreign (e.g. Mexican) economy? On the other hand, when 1 Poundsterling can be converted to around US$1.60, does that mean the British economy is stronger than the U.S. economy? Why? Why not?

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Finance Basics: Exchange rate fundamentals
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