1. When prices rose in Mexico faster than in the United States and the nominal exchange rate remained constant, the real exchange rate _________.
2. If a country borrows in dollars, a depreciation of its own currency against the dollar will_________ the burden of its debt.
3. Milton Friedman is the economist who believed that the Asian financial crisis was an example of market overreaction that could have been avoided by bolder actions from world organizations. _________ (True/False)
4. In the 1990s, Argentina pegged its currency to the dollar. As the dollar appreciated in world markets, this caused an increase in Argentina s trade _________.
5. Argentina after the Crisis. Use the Web to find data on economic growth and well-being for Argentina today. (Try searching for Argentina and recovery.) How has Argentina fared after its financial crisis in 2002?
6. The Dollar and the Financial Crisis. It is generally recognized that the world-wide financial crisis in 2008 originated in the United States, as its financial institutions were most active in fueling the housing boom. However, investors throughout the world had bought U.S. mortgage-related securities and this spread the global crisis. When the crisis hit, the value of the U.S. dollar rose sharply against many other currencies. What might have caused this appreciation?