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Explain why countires might impose exchange controls and give examples of how such controls might work.

1. If the inflation rate in Argentina is 10% and the inflation rate in Brazil is 5%, and if purchasing power parity holds, what would happen to the peso/real exchange rate? (would the Argentina peso depreciate or appreciate and by how much?)

 

2. Explain why countires might impose exchange controls and give examples of how such controls might work.

 

3. The Bretton Woods system was intended to help deficit countries avoid defltionary econimic policies. Explain about it.


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