Suppose that Argentina's dollar-denominated external assets and liabilities are $10 billion and $100 billion, respectively, and its Argentine peso-denominated external assets and liabilities are each 50 billion pesos (P). Suppose further that Argentina fixes its exchange rate at P1 = $US1. What is the dollar value of Argentina's total external wealth?
A) -$60 billion
B) -$150 billion
C) -$90 billion
D) -$210 billion
Answer: C) -$90 billion
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Describe the Malthusian Cycle
What will be an ideal response?
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A) falls, which pushes banks that own them closer to insolvency. B) rises, which pushes banks that own them closer to insolvency. C) falls; which pushes banks that own them towards greater solvency. D) rises, which pushes banks that own them towards greater solvency.