How could Venezuela's inflationary problem be resolved once and for all? Consider and remark on the the following solutions, considering what they involve and how effective they might be. a. A full official dollarization b. Adoption of BitCoin or nother crypto currency such as the Petrolo. c. Legislation mandating a balanced budget approved by the Congress and signed into law by the President.
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N6
How could Venezuela's inflationary problem be resolved once and for all? Consider and remark
on the the following solutions, considering what they involve and how effective they might be.
a. A full official dollarization
b. Adoption of BitCoin or nother crypto currency such as the Petrolo.
c. Legislation mandating a balanced budget approved by the Congress and signed into law by the
President.
Step by step
Solved in 2 steps
- Can you think of any major disadvantages to dollarization? How would a central bank work in a country that has dollarized?(a) Calculate each of the following for Year 2. Show your work. (i) Real GIDP per capita for Arturia (il) Real GDP per capita for Ringberg (b) If Arturia and Ringberg have the same velocity of money in Year 2, which nation must have the higher money supply in Year 2? Explain (c) Calculate each of the following in Year 2. Show your work. (i) The inflation rate in Arturia (il) The inflation rate in Ringberg (d) Based on your answer to part (c), if the nominal interest rate is the same for both nations in Year 2, which nation experiences the higher real interest rate in Year 2? Explain. (e) Ringberg produces consumer goods and capital goods. While maintaining full employment, Ringberg decides to allocate more resources to the production of consumer goods. What will be the effect on the long-run economic growth rate in Ringberg? Explain. esc C 1 のIn Brazil, a country that underwent a rapid inflationbefore 1994, many transactions were conducted in dollars rather than in reals, the domestic currency. Why?
- Over the last 10 years, the average rate of inflation has been 1.51%. What is the purchasing power of a dollar today in terms of what a peso could purchase in 2012?True or False: Suppose your return on retirement account is 8%, and inflation rate is 9%, then you are stillearning more.”.Why do you think currencies of countries with high inflation rates tend to have forwarddiscounts?
- Soru 31. (2.5 puan) Which one is not a cost of inflation? A Uncertainty B Redistribution с Menu costs D Trade surplus Soru 32. (2.5 puan) Which one might be an example of divisibility of money? A Paper money is portable. B Gold does not rust. с 1 US Dollar can be broken down to 100 cents. D There are security threads and watermarks on paper money. Soru 33. (2.5 puan) Which one is not correct for indifference curves? A The indifference curves can intersect at one point. B An indifference curve shows all combinations of X and Y that give a particular level of utility. The further out the indifference curve, the higher the level of utility D An indifference curve shows diminishing marginal rate of substitution.why is the spread between a USD/CNH 3mth forward and USD/CNY 3mth forward tighter than the one of USD/CNH 1mth forward and USD/CNY 1mth forward? How can you do a positive carry trade with this?a. Examine the fundamental causes of a nation’s business cycle fluctuations. Also, examine the relationship between total spending by government and consumers in a nation and the location of the countries’ GDP on the business cycle. b. 1. Suppose you have $200,000 in a bank term account. You earn 5% interest per annum from this account.You anticipate that the inflation rate will be 4% during the year. However, the actual inflation rate for the year is 6%.Calculate the impact of inflation on the bank term deposit you have and examine the effects of inflation in your city of residence with attention to food and accommodation expenses. 2. The Australian Bureau of Statistics (ABS) reported in May 2017 that the civilian population in Australia over 15 years of age was 20.8 million.Of this population of 20.8 million Australians, 13.5 million were employed and 0.7 million were unemployed.Calculate Australia’s labor force and the number of people in the civilian population who were not in…
- Cover A strong dollar is normally expected to cause: O low unemployment and low inflation in the U.S. O high unemployment and high inflation in the U.S. O high unemployment and low inflation in the U.S. O low unemployment and high inflation in the U.S. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.Consider two countries, A and B. In A, new technologies (e.g., mobile payment apps and cryptocurrencies) have been enthusiastically adopted by the population, thereby reducing the proportion ofincome that is held as real money balances. Over this period, no such changes occurred in B. Ifthe rate of money growth and the growth rate of real GDP were the same in A and B over thisperiod, then how would the rate of inflation differ between the two countries?Assume that the Japanese government wants to reduce inflation. Which of the following would be an appropriate action for the Japanese government? A. Sell yen for foreign currency B. Decrease interest rates C. None of the options are correct D. Buy yen with foreign currency E. Increase interest rates