Author Question: Some economists claim that the Chilean experience during the 1990s was much more successful than its ... (Read 29 times)

Chloeellawright · **on:** Jun 30, 2018

Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors. Evaluate the Chilean policies during that decade.

What will be an ideal response?

Question 2

Suppose that the forward rate of Mexican pesos per dollar is selling flat, with both the spot and forward rates trading at 15 pesos per dollar.

If the relevant interest rates for a foreign exchange speculator are 3 percent on dollars and 13 percent in pesos, a potential arbitrage operation would involve A) selling pesos in the forward market.
B) buying pesos in the forward market.
C) borrowing pesos now.
D) All of the above.

cswans24 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

Students should refer to the democratic nature of the regime, and the fact that the policies specifically targeted corruption.

Answer to Question 2

A