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Author Question: Explain why a exchange rate-based stabilization plan may result in a real appreciation? What will ... (Read 88 times)

CORALGRILL2014

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on: Jun 30, 2018
Explain why a exchange rate-based stabilization plan may result in a real appreciation?
 
  What will be an ideal response?

Question 2

Explain how Eurobanks played a role in the Iranian Hostage Crisis in 1979.
 
  What will be an ideal response?


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scottmt

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Reply #1 on: Jun 30, 2018
Answer to Question 1

Real appreciation may result for any of three reasons: first, persistent inflation due to say lagged wage indexation; second, lack of credibility of the policy; and third, productivity shifts due to inflation reduction or efficient reforms. See also Figure 22-3 for illustration in the case of Argentina, Chile, Brazil and Mexico. See also Chapter 15.

Answer to Question 2

When American hostages were taken by Iranians at the American embassy in Tehran, President Carter froze all Iranian assets in U.S. banks as well as in their European branches.


CORALGRILL2014

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Reply 2 on: Jun 30, 2018
Gracias!

Viet Thy

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Reply 3 on: Yesterday
Excellent

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