Question 1

What are the costs of capital mobility?

Accepted Answer

The cost is potentia

Question 2

A lender of last resort

Accepted Answer

A) makes loans when no one else will. 
B) makes loans without regard for risk. 
C) is a firm that is forced to make loans for its own survival. 
D) Both A and B. 
E) None of the above. 
A) makes loans when no one else will. 
B) makes loans without regard for risk. 
C) is a firm that is forced to make loans for its own survival. 
D) Both A and B. 
E) None of the above.

Question 3

When expansionary fiscal and monetary policies are joined with a ________ exchange rate system,the various components of economic policy often interact in ways that lead to a crisis followed by a steep recession.

Accepted Answer

A) fixed 
B) floating 
C) crawling peg 
D) flexible 
A) fixed 
B) floating 
C) crawling peg 
D) flexible

Question 4

Which of the following does not occur in resolving a debt crisis?

Accepted Answer

A) Debts are restructured 
B) Repayment periods are shortened 
C) Interest rates are reduced 
D) Some partial debt forgiveness 
A) Debts are restructured 
B) Repayment periods are shortened 
C) Interest rates are reduced 
D) Some partial debt forgiveness

Question 5

International financial flows changed in meaningful ways,and these changes were brought to the attention of policy makers by the Asian financial crisis.Describe three changes.

Accepted Answer

First,international financial flows were

Question 6

Exchange rate crises are only associated with fixed exchange rate systems.

Accepted Answer

A) True 
 B)False

Question 7

An exchange rate crisis may lead to a banking crisis and disintermediation.

Accepted Answer

A) True 
 B)False

Question 8

How were macroeconomic balances different in the period from 2000 to 2007 from past financial crises?

Accepted Answer

There was not an issue with devaluing ex

Question 9

Describe the background factors that contributed to the Asian financial crisis.

Accepted Answer

Investors were seeking higher growth and

Question 10

Describe the Mexican peso crisis in terms of the imbalances that caused it,the policies Mexico used to respond,and the lessons learned.

Accepted Answer

Macroeconomic imbalances included an ove

Question 11

The two main types of economies generating current account surpluses from 2000 to 2007 were Asian exporters and oil producers.

Accepted Answer

A) True 
 B)False

Question 12

One characteristic of a financial crisis caused by macroeconomic imbalances is that it

Accepted Answer

A) may or may not be predictable. 
B) will occur eventually even though its timing is unpredictable. 
C) may be caused by expansionary fiscal policies accompanied by high budget deficits. 
D) may be caused by high deficits financed by increases in the money supply. 
E) All of the above. 
A) may or may not be predictable. 
B) will occur eventually even though its timing is unpredictable. 
C) may be caused by expansionary fiscal policies accompanied by high budget deficits. 
D) may be caused by high deficits financed by increases in the money supply. 
E) All of the above.

Question 13

What three critical factors or preconditions turned a national,U.S.problem into a global financial crisis in 2007.Be sure to address the role securitization played and how it affected regulators.

Accepted Answer

The three critical factors were the evol

Question 14

All of the following are possible outcomes of a banking crisis except

Accepted Answer

A) depositors,but not banks,may lose all or a portion of their assets. 
B) a recession due to decreases in consumption by households. 
C) decreases in lending practices by banks. 
D) decreases in investment. 
E) a contagion effect of the crisis from vulnerable banks to financial institutions on sound basis. 
A) depositors,but not banks,may lose all or a portion of their assets. 
B) a recession due to decreases in consumption by households. 
C) decreases in lending practices by banks. 
D) decreases in investment. 
E) a contagion effect of the crisis from vulnerable banks to financial institutions on sound basis.

Question 15

It is normal and typical in a debt crisis for debtors to completely repudiate all their debts.

Accepted Answer

A) True 
 B)False

Question 16

If governments promise to bail out the financial system in the event of a crisis,this creates a moral hazard problem.Describe this problem.

Accepted Answer

If the costs of failure are removed,the

Question 17

The IMF conditionality may include

Accepted Answer

A) changes in the fiscal and monetary policies of the country facing the financial crisis. 
B) changes in the exchange rate policies. 
C) regulating and restructuring the financial sector of the economy of the country in crisis. 
D) structural policies affecting international trade and public enterprises. 
E) All of the above. 
A) changes in the fiscal and monetary policies of the country facing the financial crisis. 
B) changes in the exchange rate policies. 
C) regulating and restructuring the financial sector of the economy of the country in crisis. 
D) structural policies affecting international trade and public enterprises. 
E) All of the above.

Question 18

The Mexican peso crisis of 1994 and 1995 was directly related to

Accepted Answer

A) the start of NAFTA. 
B) a large capital account surplus. 
C) a large capital account deficit. 
D) an undervalued peso. 
E) a large current account surplus. 
A) the start of NAFTA. 
B) a large capital account surplus. 
C) a large capital account deficit. 
D) an undervalued peso. 
E) a large current account surplus.

Question 19

The financial crisis that started in 2007 was unusual because it started in an advanced economy,the United States.

Accepted Answer

A) True 
 B)False

Question 20

What agreement has been reached to reduce the moral hazard problem and what does it require?

Accepted Answer

The Basel Capital Accord,which

What are the costs of capital mobility?

A lender of last resort

When expansionary fiscal and monetary policies are joined with a ________ exchange rate system,the various components of economic policy often interact in ways that lead to a crisis followed by a steep recession.

Which of the following does not occur in resolving a debt crisis?

International financial flows changed in meaningful ways,and these changes were brought to the attention of policy makers by the Asian financial crisis.Describe three changes.

Exchange rate crises are only associated with fixed exchange rate systems.

An exchange rate crisis may lead to a banking crisis and disintermediation.

How were macroeconomic balances different in the period from 2000 to 2007 from past financial crises?

Describe the background factors that contributed to the Asian financial crisis.

Describe the Mexican peso crisis in terms of the imbalances that caused it,the policies Mexico used to respond,and the lessons learned.

The two main types of economies generating current account surpluses from 2000 to 2007 were Asian exporters and oil producers.

One characteristic of a financial crisis caused by macroeconomic imbalances is that it

What three critical factors or preconditions turned a national,U.S.problem into a global financial crisis in 2007.Be sure to address the role securitization played and how it affected regulators.

All of the following are possible outcomes of a banking crisis except

It is normal and typical in a debt crisis for debtors to completely repudiate all their debts.

If governments promise to bail out the financial system in the event of a crisis,this creates a moral hazard problem.Describe this problem.

The IMF conditionality may include

The Mexican peso crisis of 1994 and 1995 was directly related to

The financial crisis that started in 2007 was unusual because it started in an advanced economy,the United States.

What agreement has been reached to reduce the moral hazard problem and what does it require?

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters

Exam 12: International Financial Crises

What are the costs of capital mobility?

A lender of last resort

When expansionary fiscal and monetary policies are joined with a ________ exchange rate system,the various components of economic policy often interact in ways that lead to a crisis followed by a steep recession.

Which of the following does not occur in resolving a debt crisis?

International financial flows changed in meaningful ways,and these changes were brought to the attention of policy makers by the Asian financial crisis.Describe three changes.

Exchange rate crises are only associated with fixed exchange rate systems.

An exchange rate crisis may lead to a banking crisis and disintermediation.

How were macroeconomic balances different in the period from 2000 to 2007 from past financial crises?

Describe the background factors that contributed to the Asian financial crisis.

Describe the Mexican peso crisis in terms of the imbalances that caused it,the policies Mexico used to respond,and the lessons learned.

The two main types of economies generating current account surpluses from 2000 to 2007 were Asian exporters and oil producers.

One characteristic of a financial crisis caused by macroeconomic imbalances is that it

What three critical factors or preconditions turned a national,U.S.problem into a global financial crisis in 2007.Be sure to address the role securitization played and how it affected regulators.

All of the following are possible outcomes of a banking crisis except

It is normal and typical in a debt crisis for debtors to completely repudiate all their debts.

If governments promise to bail out the financial system in the event of a crisis,this creates a moral hazard problem.Describe this problem.

The IMF conditionality may include

The Mexican peso crisis of 1994 and 1995 was directly related to

The financial crisis that started in 2007 was unusual because it started in an advanced economy,the United States.

What agreement has been reached to reduce the moral hazard problem and what does it require?

The United States in a Global Economy

International Economic Institutions Since World War Ii

Comparative Advantage and the Gains From Trade

Comparative Advantage and Factor Endowments

Beyond Comparative Advantage

The Theory of Tariffs and Quotas

Commercial Policy

International Trade and Labor and Environmental Standards

Trade and the Balance of Payments

Exchange Rates and Exchange Rate Systems

An Introduction to Open Economy Macroeconomics

The United States in the World Economy

The European Union: Many Markets Into One

Trade and Policy Reform in Latin America

Export-Oriented Growth in East Asia

The Bric Countries in the World Economy

Filters