Suppose Argentina Has a 10% Rate of Inflation,while Inflation Is

question 215

Multiple Choice

Suppose Argentina has a 10% rate of inflation,while inflation is 3% in the United States.If exchange rates don't change:

• A) U.S.goods will have a disadvantage in the world market compared to Argentina.
• B) Argentine goods will become more expensive in the United States.
• C) since real exchange rates already take inflation into consideration,the inflation should have no effect on global trade.
• D) goods made in Argentina will become cheaper,because their pesos have lost their value.

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Definitions:

Fibrous Connective Tissue

A type of connective tissue that is characterized by a high density of collagen fibers, providing strength and elasticity.

Syndesmosis

A type of fibrous joint in which two bones are joined together by a band of connective tissue, allowing for slight movement.

Synovial Joint

A type of joint that is surrounded by a fluid-filled capsule, allowing for smooth movement between bones.

Periosteum

A dense, fibrous membrane covering the outer surface of bones, providing nourishment and involved in bone growth and repairing.