Exercises: Remittances and labor informality

Remittances are the money that people working abroad send back to their families in Mexico. A family in Guadalajara receives $450$ dollars every month from a relative working in the United States.

1. a) At an exchange rate of $\$17.20$ pesos per dollar, how many pesos does the family receive each month?
2. b) If the peso appreciates and the exchange rate drops to $\$16.50$, how many pesos does it receive now? Explain who wins and who loses when the peso appreciates: the family receiving remittances or the Mexican tourist traveling to the United States?

In Mexico, more than half of employed people work informally: with no contract, no social security (IMSS), and no legal benefits.

1. a) At a street market, $40$ out of $70$ stalls are informal. Compute the percentage they represent and compare it with the national figure mentioned above.
2. b) Explain two consequences of informality for the worker and one for the country's public finances.
3. c) Propose a public policy measure that could reduce informality and justify it.