In 1991, Argentina Adopted a Currency Board (The Argentine Peso

question 47

Essay

In 1991, Argentina adopted a currency board (the Argentine peso had been pegged to the U.S. dollar at a one-to-one rate of exchange) to fight hyperinflation. This currency board lasted for a decade until the economic crisis of 2001. Discuss: 1) the pros and cons of a currency board policy, 2) the crisis condition of the Argentina's economy by 2001, and 3) the lessons to be drawn from the Argentina story.

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Definitions:

Direct Labor Hour

A measure of the labor time specifically involved in the direct manufacture of products, not including indirect tasks.

Direct Labor Rate Variance

It's a measure used in cost accounting to determine the difference between the actual labor cost per hour and the expected (or standard) cost per hour.

Direct Labor Time Variance

The difference between the actual time taken to manufacture a product and the standard time expected, multiplied by the wage rate, indicating inefficiency or efficiency in production.

Standard Hours Per Unit

The predetermined amount of time expected to be required to produce one unit of a product under standard operating conditions.