Author Question: If a country has a collapsing currency due to large budget deficits financed by monetary expansion, ... (Read 122 times)

nummyann · **on:** Jun 30, 2018

If a country has a collapsing currency due to large budget deficits financed by monetary expansion, the cure is to

A) default on sovereign debt and restructure the economy.
B) peg the currency to something different.
C) cut the deficit and raise interest rates.
D) increase the rate of inflation to reduce the real value of government debt.

Question 2

If countries have similar factor endowments and productivities, their trade is likely to be interindustry.

Indicate whether the statement is true or false