Part of the reason for the Mexican peso crisis of 1994 was Mexico's decision to
A) allow the peso to depreciate too rapidly.
B) allow the peso to appreciate too rapidly.
C) maintain relatively low nominal interest rates in the face of relatively high inflation.
D) maintain a roughly fixed nominal exchange rate in the face of relatively high inflation.
E) run a very small budget deficit in the face of relatively high inflation.
D
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The theory of efficient markets suggests that the steep decline the value of stocks traded on the NASDAQ was due to
a. a speculative bubble. b. a response to new information about firms' expected future profitability.. c. a natural cycle in technology stock prices evidenced by charts of previous prices trends. d. moral hazard.
Fully anticipated monetary policy actions cannot alter either the rate of unemployment or the level of real GDP. This statement is
A) the nonaccelerating inflation rate of unemployment theory. B) discretionary policy making. C) the policy irrelevance proposition. D) the Phillips curve.
Explain the concepts of absolute advantage and comparative advantage. Is it possible for a firm to have an absolute advantage in producing something without having a comparative advantage? Why or why not?
What will be an ideal response?
The form of property ownership rights inherited from the colonial period was characterized by which of the following?
(a) Property ownership was almost ideal as the base for a free-market economy. (b) Property ownership established property, including land, as a "commodity" that could be easily bought and sold. (c) Property ownership proved to be an excellent vehicle for economic growth. (d) All of the above.