Using the diagram in exercise 286, illustrate the effect of the change in Japanese tastes if exchange rates are fixed. What will happen to the foreign exchange market equilibrium? When and why should exchange rates change under a fixed-exchange-rate system? Suppose you just returned home from a vacation in Mazatla´n, Mexico, where you exchanged U.S. dollars for Mexican pesos. How did your trip to Mexico affect the supply and demand for dollars and the exchange rate (assume that all other things are equal)?