What is Argentina's Convertibility Law of April 1991? Explain. ...

[jc611]

What is Argentina's Convertibility Law of April 1991? Explain.
 
  What will be an ideal response?

Question 2

It has been claimed that foreign governments have attempted to influence votes in the U.S. that would promote policies of protectionism within the U.S.
 
  On the surface this appears to be totally illogical and counter intuitive, as this would presumably lessen the possibilities of foreigners' exports to the U.S.

[anoriega3]

Answer to Question 1

The convertibility law is the law that made Argentina currency fully convertible into U.S. dollars at a fixed rate of exactly one peso per dollar. The law also required that the monetary base be backed entirely by gold or foreign currency.

Answer to Question 2

This would make sense only if the form of protectionism is a tariff. However, if it is a quota, then the scarcity rents may be captured by established foreign producers. Hence, the reaction of the Japanese to automobile quotas was to dramatically increase the high-end, highly profitable automobiles. This would be even more self-evident if the protectionism took the form of a Voluntary Export Restraint (VER), or a detailed formalized bilateral cartel, such as the old Multi-Fibre Agreement.