When Mexico experiences a period of high inflation and Mexicans lose confidence in their peso as a store of value, which of the following would be most likely to occur?
A. Mexicans would use a different currency as a medium of exchange.
B. The value of foreign currencies would depreciate relative to the peso.
C. The buying power of the peso would increase.
D. The demand for pesos would increase.
Answer: A
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Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140Assume that the MPC is 0.9 and the reserve requirement is 0.2. If the Federal Reserve needs to decrease aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 4%, then the Federal Reserve should ________ bonds on the open market equal to ________.
A. sell, $2 billion B. sell, $4 billion C. buy, $2 billion D. buy, $4 billion
When comparing average wages for black and white men in the United States, wages paid to black men have been about 20 percent less than those paid to white men
a. True b. False Indicate whether the statement is true or false
Which of the following is a normative statement?
A. The government should spend more to help the poor. B. A tax cut will cause higher inflation. C. Tariffs on imported cars result in higher prices for domestic auto consumers. D. Reducing the budget deficit will also reduce the balance of trade deficit.
A quota that limits U.S. imports of cane sugar
A. helps both U.S. consumers and U.S. producers at the expense of foreign producers. B. harms U.S. consumers more than it helps U.S. producers. C. helps U.S. producers more than it hurts U.S. consumers. D. harms foreign producers more than it helps U.S. producers.