Fixed exchange rates are typically maintained through

the sale or purchase of foreign exchange by the government

In 2008, 4 Argentine pesos exchanged for 1 Dollar. Today 600 pesos equals one dollar. This is best explained by

higher rates of inflation in Argentina than the U.S.

The roles of money include all of the following except

convertible into useful purpose

The difficult part of slowing down inflation is

changing expectations about inflation

The best takeaway from the story was that

four buddies spending time in a campus bar can come up with great ideas

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Inflation in Brazil

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Questions 13

Answers

1
Under the classic gold flow mechanism, a country that runs a trade deficit would experience
currency depreciation
deflation
inflation
net gold inflows
2
Prior to Jan 1, 1994, the Brazilian currency was called the
lira
peso
real
cruzeiro
3
According to the story, inflation is caused by
government spending too much
wars and conflict
greed
printing too much money
4
If eggs cost $1 and inflation is 80% per month, eggs will cost how much in 12 months?
$1157
$543
$22
$87
5
Fixed exchange rates are typically maintained through
management of domestic monetary policy
trade policy
the sale or purchase of foreign exchange by the government
a system of capital controls
6
Approximately _________ of all countries allow their currencies to float.
none
two thirds
one third
nine-tenths(almost all)
7
In the early 1990's, inflation in Brazil was about
2.3% per year
Brazil had deflation during that time
80% per year
80% per month
8
The story of Brazil in the 90's is a case study in
how to end hyper-inflation
that it's possible to trick an entire nation
all of the above
how important confidence is in regards to fiat currencies
9
In 2008, 4 Argentine pesos exchanged for 1 Dollar. Today 600 pesos equals one dollar. This is best explained by
higher rates of inflation in Argentina than the U.S.
lack of economic growth in Argentina relative to the U.S.
depletion of Argentine gold mines
higher interest rates in the U.S.
10
The roles of money include all of the following except
medium of exchange
unit of account
store of value
convertible into useful purpose
11
The difficult part of slowing down inflation is
changing expectations about inflation
enforcing price controls
slowing down the growth in the money supply
getting corrupt politicians to change
12
Under the gold flow mechanism, trade balances are evened out through
government policy
the price mechanism
net exporters forgiving debts
net importers running out of gold
13
The best takeaway from the story was that
don't spend if you can't tax
price controls are needed when inflation is high
The economists should get credit for Brazil winning the world cup in 1994.
four buddies spending time in a campus bar can come up with great ideas

Inflation in Brazil Flashcards | StudBud