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 real interest rates and caused the Argentinean currency to appreciate. B. raised Argentinean real interest rates and caused the Argentinean currency to depreciate. C. lowered Argentinean real interest rates and caused the Argentinean currency to depreciate. D. lowered Argentinean real interest rates and caused the Argentinean currency to appreciate.

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 real interest rates and caused the Argentinean currency to appreciate. B. raised Argentinean real interest rates and caused the Argentinean currency to depreciate. C. lowered Argentinean real interest rates and caused the Argentinean currency to depreciate. D. lowered Argentinean real interest rates and caused the Argentinean currency to appreciate.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter8: Aggregate Demand And Aggregate Supply

Section: Chapter Questions

Problem 14QP

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