In the early 2000s, Ecuador replaced its currency, the sucre, with the U.S. dollar as its official currency. What will no longer be possible for the government of Ecuador?
A. Financing government deficits by borrowing in the financial markets.
B. Running a balance of payments deficit on the capital account.
C. Running a balance of payments deficit on the current account.
D. Financing government deficits by printing money.
Answer: D
You might also like to view...
Consider the labor market for computer programmers. During the late 1990s, the value of the marginal product of all computer programmers increased dramatically. Holding all else equal, what effect did this process have on the labor market for computer programmers? The equilibrium wage
a. increased, and the equilibrium quantity of labor increased. b. increased, and the equilibrium quantity of labor decreased. c. decreased, and the equilibrium quantity of labor increased. d. decreased, and the equilibrium quantity of labor decreased.
Points outside the production possibility frontier are
A. producible. B. endowment points. C. consumer equilibrium points. D. unattainable.
What are constant returns to scale?
a. cost disadvantages in an output range where LRATC rises as output expands b. per-unit cost reductions in an output range where LRATC falls as output increases c. returns in an output range where LRATC does not change as output varies d. cost savings that occur in an output range where LRATC falls due to low output
Regular interest payments made to bondholders are called ________ payments.
A. reserve B. coupon C. dividend D. diversification