Multiple Choice
In 2002 it looked like the Argentinean government might default on its debt (which eventually it did) .The open-economy macroeconomic model predicts that this should have
A) raised Argentinean interest rates and caused the Argentinean currency to appreciate.
B) raised Argentinean interest rates and caused the Argentinean currency to depreciate.
C) lowered Argentinean interest rates and caused the Argentinean currency to appreciate.
D) lowered Argentinean interest rates and caused the Argentinean currency to depreciate.
Correct Answer:
Verified
Correct Answer:
Verified
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