Multiple Choice
In 2002 and again in 2014, the Argentinean government defaulted on its debt. Which statement is consistent with what the open-economy macroeconomic model predicts?
A) This event should have raised Argentinean interest rates and caused the Argentinean currency to appreciate.
B) This event should have raised Argentinean interest rates and caused the Argentinean currency to depreciate.
C) This event should have lowered Argentinean interest rates and caused the Argentinean currency to appreciate.
D) This event should have lowered Argentinean interest rates and caused the Argentinean currency to depreciate.
Correct Answer:
Verified
Correct Answer:
Verified
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