In 1990, which Latin American countries saw inflation climb above 2,000%?
a. Colombia and Venezuela
b. Mexico and Guatemala
c. Brazil and Argentina
d. Uruguay and Paraguay
c. Brazil and Argentina
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You notice that when interest rates increases, new residential housing prices tend to decrease. This observation indicates that
A) there must be false causality between interest rates and housing prices. B) higher interest rates must cause low housing prices. C) a scatter diagram between interest rates and housing prices will show a negative relationshi
A system of exchange rate determination with no central bank intervention is a
a. fixed exchange rate system. b. flexible exchange rate system. c. floating exchange rate system. d. either a flexible or a floating exchange rate system.
The long-run average cost (LRAC) curve is based on a group of:
a. short-run average cost (SRAC) curves. b. accounting profit levels. c. competitive firms. d. costs incurred when output is zero.
Suppose Kellogg's, General Mills, and Post make the majority of breakfast cereal sold in the United States. If Kellogg's decides to decrease its prices by 10%,
A. General Mills and Post will immediately respond because of mutual interdependence. B. Kellogg's will also decrease the variety of cereals it offers because of nonprice competition. C. the other firms in the industry will not change their pricing strategy because of the kinked demand curve. D. more firms will enter the market due to low barriers to entry.