S 1. How does Brazil hope to control its currentaccount deficit through a tight monetary policy? What alternatives are available to control Brazils current-account deficit? 2. How will Brazils tight money policy affect its fiscal deficit? How will it affect Brazils real (inflation-adjusted) interest rates, both shortterm and long-term rates? 3. Why have Brazils interest rates generally fallen in recent years? 4. How would reform and privatization of the social security system improve Brazils savings rate? What would be the likely consequences of this improvement for Brazils current-account balance and the reals value? Explain. 5. What are the costs and benefits of using currency controls to defend the real? 6. Why might speculators view the re