According to this Application, because Argentina pegged its currency to the U.S. dollar, the appreciation of the dollar caused a large trade deficit in Argentina. This trade deficit meant that
A) the demand for Argentinean pesos exceeded the supply of the pesos.
B) the demand for Argentinean pesos exceeded the supply of U.S. dollars.
C) the supply of Argentinean pesos exceeded the demand for the pesos.
D) the supply of Argentinean pesos exceeded the demand for U.S. dollars.
Question 2
As the economy enters a strong expansion, then firms' demand for loanable funds
A) increases because the nominal interest rate rises.
B) increases because expected profit increases.
C) decreases because expected profit decreases.
D) decreases because the nominal interest rate falls.
E) increases because the real interest rate rises.
