In 2002 and Again in 2014, the Argentinean Government Defaulted

question 146

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.

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Definitions:

Sneezing

A sudden, involuntary expulsion of air from the nose and mouth due to irritation in the nasal passages.

Fiberglass

A material consisting of extremely fine glass fibers, used in various applications including insulation and reinforcement.

Plaster

A soft mixture of lime with sand or cement and water for spreading on walls, ceilings, or other structures to form a smooth hard surface when dried.

Dressing

A sterile material used to cover a surgical or other wound.