The expectation of future devaluation causes a balance of payments crisis marked by
A) a sharp rise in reserves and a fall in the home interest rate below the world interest rate.
B) a sharp fall in reserves and an even bigger fall in the home interest rate below the world interest rate.
C) a sharp fall in reserves and a rise in the home interest rate above the world interest rate.
D) a sharp rise in reserves and an even greater rise in the home interest rate above the world interest.
E) a sharp rise in reserves and a rise in the home interest rate to the level of the world interest.
C
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Suppose that a price index in Paraguay was 131 in 2015 and 152 in 2016. The inflation rate between those two years was approximately
A) 10.5 percent. B) 11.6 percent. C) 16 percent. D) 21 percent.
The fact that a firm is a price-setter does not ensure it will make a positive economic profit in the short run and over time
Indicate whether the statement is true or false