When the Canadian dollar appreciates against the Mexican peso, this typically results in a _____ in Mexico's trade balance due to more expensive imports and cheaper exports.

When the Canadian dollar appreciates against the Mexican peso, it means that the Canadian dollar is stronger compared to the peso. This makes goods from Canada more expensive for people in Mexico, which may lead to a decrease in imports from Canada. At the same time, Mexican goods become cheaper for Canadians, possibly increasing exports from Mexico to Canada. As a result, Mexico's trade balance could worsen because it may be buying less from Canada while selling more to Canada. For example, if a car that costs 20,000 pesos becomes too expensive for Mexican buyers due to the stronger Canadian dollar, they might buy fewer cars from Canada, leading to a negative impact on Mexico's trade balance.