The main reason for the crisis in Argentina in 2001 and 2002, as ...

[james]

The main reason for the crisis in Argentina in 2001 and 2002, as to do with exchange rate policy, i.e., the continued peg of the exchange rate to the dollar. Discuss.
 
  What will be an ideal response?

Question 2

A convertible currency is a currency that may be freely exchanged for
 
  A) domestic assets.
  B) only silver.
  C) only copper.
  D) national currency.
  E) foreign currencies.

[lkoler]

Answer to Question 1

Student should emphasize that the quote is mainly true. Students should compare Argentina in those years with the better experience of Chile and Mexico with flexible exchange rates and emphasize the appreciation of the dollar.

Answer to Question 2

E