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Q. Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?
Answer: By initiating a new currency and initially pegging it to the dollar. At the cost of extensive bank failures high interest rates in 1995 and the shift to a fixed upwardly crawling peg and a substantial real appreciation of the local currency.
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Q. Suppose the relative price of good 1 falls relative to the price of. What happens to the wage rate? Answer: The labour component of the price of 1 is bigger than that of p
Q. Consider, as a result of several dynamic factors associated with exposure to international competition, Albania's economy grew, and is now shown by the rightmost production pos
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