Assume that Mexico and the U.S. are in a fixed exchange rate agreement. Suppose that the Fed increases the money supply by 40%. What would happen to the international reserve position for the U.S.?...

Assume that Mexico and the U.S. are in a fixed exchange rate agreement. Suppose that the Fed increases the money supply by 40%. What would happen to the international reserve position for the U.S.? Assume that the U.S. has to intervene to peg the exchange rate; how could they accomplish the intervention?