Author Question: Part of the reason for the Mexican peso crisis of 1994 was Mexico's decision to A) allow the peso ... (Read 73 times)

elizabeth18 · **on:** Jun 30, 2018

Part of the reason for the Mexican peso crisis of 1994 was Mexico's decision to

A) allow the peso to depreciate too rapidly.
B) allow the peso to appreciate too rapidly.
C) maintain relatively low nominal interest rates in the face of relatively high inflation.
D) maintain a roughly fixed nominal exchange rate in the face of relatively high inflation.
E) run a very small budget deficit in the face of relatively high inflation.

Question 2

Suppose the following situation exists for an economy: Kt+1/N > Kt/N. Given this information, we know that

A) saving per worker equals depreciation per worker in period t.
B) saving per worker is less than depreciation per worker in period t.
C) saving per worker is greater than depreciation per worker in period t.
D) the saving rate fell in period t.
E) none of the above