The spreadsheet provides information about the economy in Argentina. Column A is
the year, Column B is real GDP in billions of 2000 pesos, and column C is the price
A B C
1 1997 277 105.6
2 1998 288 103.8
3 1999 278 101.9
4 2000 276 102.9
5 2001 264 101.8
6 2002 235 132.9
7 2003 256 146.8
8 2004 279 160.4
9 2005 305 174.5
10 2006 331 198.0
11 2007 359 226.1
12 2008 384 267.7
a) In which years did Argentina experience inflation? In which year did it experience
b) In which years did recessions occur? In which years did expansions occur?
c) In which years do you expect the unemployment rate was highest? Why?
Argentina?© BrainMass Inc. brainmass.com October 25, 2018, 5:43 am ad1c9bdddf
a) In which years did Argentina experience inflation? 2000, 2002- 2008 In which year did it experience
deflation? 1997-1999, 2001
b) In which years did ...
Exploration of economic data from Argentina and possible relationships between unemployment and inflation.
Need Help with International Macro
2. A 1991 The Wall Street Journal cover page article entitled "Foreign Rate Increases May Worsen Slump" explained how the German central bank raised domestic interest rates in order to reduce inflation below the 3% level. At the same time, the U.S. central bank reduced domestic interest rates to fight the deepening recession in the United States.
a. Explain the pressures that rising German interest rates put on the other European Union (EU) countries' currencies. Specifically, assume exchange rates within the EU were absolutely fixed. Explain the economic effects a rise in the real German interest rate put on the DM/FF exchange rate and what the French central bank (i.e., the Bank of France) would have to do to keep the exchange rate fixed.
b. Explain the economic effects the rise in German interest rates put on the DM/FF exchange rate and what the German central bank (i.e., the Bundesbank) would have to do to keep the exchange rate fixed.
d. What is the Phillips Curve? Are your results in question (1a) consistent with the Phillips Curve?
3. In 1991, Argentina adopted a currency board that had the responsibility to maintain a fixed exchange rate between the Argentine peso and the U.S. dollar ($1 = 1 Argentine Peso). Through the Convertibility Law, Argentina also established that each peso in circulation had to be 100% collateralized with reserves in the Central Bank, assuring 100% coverage of Argentine monetary base. Assume the government promised to reduce the surging unemployment rate by trying to stimulate significant new economic growth by means of expansionary monetary policy. Since it would be constrained by the Convertibility Law from increasing the monetary base, suppose the central bank expanded the money supply by reducing the reserve ratio. Explain the economic effects that expansionary monetary policy would have on Argentina's real and nominal GDP, monetary base, money supply, real and nominal interest rates, current account, financial account, level of international reserves, real investment spending, unemployment rate, inflation rate, and velocity of money.