In April 1991, Argentina adopted a currency board primarily to address the problem of:
A. triple-digit inflation.
B. high interest rates.
C. large trade surpluses.
D. slow growth.
Answer: A
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We can derive market demand for pears by
a. adding up all the prices people are willing to pay for pears b. multiplying the number of people times the price of pears c. adding up the number of pears that producers are willing to sell d. multiplying the number of pears by the price of pears e. adding up all the individual demands for pears
Assume that the government increases spending and finances the expenditures by borrowing in the domestic capital markets. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and current international transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and current international transactions become more positive (or less negative). b. The real risk-free interest rate falls, and current international transactions become more negative (or less positive). c. The real risk-free interest rate and current international transactions remain the same. d. The real risk-free interest rate rises, and current international transactions become more negative (or less positive). e. The real risk-free interest rate rises, and current international transactions remain the same.
When the government imposes a tax on labor income, __________ the production function occurs and potential GDP _________.
Fill in the blank(s) with the appropriate word(s).
Refer to the information provided in Table 19.8 below to answer the question(s) that follow.Table 19.8Total IncomeTotal Taxes$20,000 $2,000 40,000 4,800 60,000 9,000 80,000 16,000Related to the Economics in Practice on page 393: Refer to Table 19.8. At an income level of $80,000, the average tax rate is
A. 2%. B. 5%. C. 15%. D. 20%.