The Term Original Sin by Two Economists Barry Eichengreen and Ricardo

question 78

Multiple Choice

The term Original Sin by two economists Barry Eichengreen and Ricardo Hausmann is used to describe what?

• A) low-income economy
• B) developing countries' inability to borrow in their own currencies
• C) a sin that is part of the Ten Commandments
• D) borrows not able to receive loans
• E) not diversifying economies portfolios

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Definitions:

Money Demand Curve

A graphical representation showing the relationship between the quantity of money people want to hold and the interest rate, under the assumption all other factors remain constant.

Opportunity Cost

The consequence of losing possible gains from various options when one preference is made.

Interest Rate

The cost of borrowing money or the return for investing money, usually expressed as a percentage per annum.

Money Demand

The desire to hold cash or liquid assets rather than making investments, influenced by interest rates, income levels, and inflation.