2.The U.S. bi-lateral real exchange rate with Mexico is defined as S/(P /P ), where S is the MEX US nominal exchange rate in pesos per U.S. dollar (pesos/$), P is the Mexican consumer price MEX level, and P is the U.S. consumer price level. What would the effect on U.S. competitiveness US be, other things being equal, of: A fall in the peso relative to the dollar? A rise in Mexican inflation? A rise in U.S. inflation? A simultaneous rise in the peso and decline in Mexican inflation of about the same amount (say, 10%)?.