Question 1

Why is China's currency undervalued?

Accepted Answer

A)  The Asian miracle is over. 
B)  They do not trade with the U.S. 
C)  They do not allow their currency to appreciate despite large external surpluses. 
D)  They are stockpiling international reserves to protect against the next East Asian crisis. 
E)  They are not aware of the real value of their currency. 
A)  The Asian miracle is over. 
B)  They do not trade with the U.S. 
C)  They do not allow their currency to appreciate despite large external surpluses. 
D)  They are stockpiling international reserves to protect against the next East Asian crisis. 
E)  They are not aware of the real value of their currency.

Question 2

The relationship between annual real per-capita GDP and corruption across countries has been found to be

Accepted Answer

A)  negative. 
B)  positive. 
C)  The relationship was negative in the late 1960s but is now positive. 
D)  The relationship was in the late 1960s but is now negative. 
E)  There is no relationship between these two variables. 
A)  negative. 
B)  positive. 
C)  The relationship was negative in the late 1960s but is now positive. 
D)  The relationship was in the late 1960s but is now negative. 
E)  There is no relationship between these two variables.

Question 3

In general, the development of underground economic activity ________ economic efficiency

Accepted Answer

A)  hinders 
B)  has no effect 
C)  aides 
D)  hard to tell, sometime hinders, sometimes aides 
E)  spikes 
A)  hinders 
B)  has no effect 
C)  aides 
D)  hard to tell, sometime hinders, sometimes aides 
E)  spikes

Question 4

The problem of moral hazard has led

Accepted Answer

A)  the governments of many developing countries to guarantee repayment of all loans. 
B)  to higher growth rates in Latin America. 
C)  to excessively speculative investment. 
D)  to both privilege and responsibility of creditors. 
E)  to stable investments with small and steady expected gains. 
A)  the governments of many developing countries to guarantee repayment of all loans. 
B)  to higher growth rates in Latin America. 
C)  to excessively speculative investment. 
D)  to both privilege and responsibility of creditors. 
E)  to stable investments with small and steady expected gains.

Question 5

Compare currency board to conventional fixed exchange rate.

Accepted Answer

Currency board may not acquire domestic

Question 6

The per-capita GNP of the industrial group is about ________ times that of the upper middle-income countries.

Accepted Answer

A)  6 
B)  10 
C)  15 
D)  19 
E)  2 
A)  6 
B)  10 
C)  15 
D)  19 
E)  2

Question 7

Most developing countries have tried to

Accepted Answer

A)  liberalize capital movement. 
B)  control capital movements. 
C)  Hard to tell from the data. 
D)  in the 1960s and 1970s control, now to liberalize. 
E)  in the 1960s and 1970s liberalize, now to control. 
A)  liberalize capital movement. 
B)  control capital movements. 
C)  Hard to tell from the data. 
D)  in the 1960s and 1970s control, now to liberalize. 
E)  in the 1960s and 1970s liberalize, now to control.

Question 8

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

Accepted Answer

By introducing a new currency and initia

Question 9

For many developing countries, natural resources or agricultural commodities make up ________ share of exports

Accepted Answer

A)  close to no 
B)  an unimportant 
C)  an important 
D)  close a to 5 percent 
E)  close to a 10 percent 
A)  close to no 
B)  an unimportant 
C)  an important 
D)  close a to 5 percent 
E)  close to a 10 percent

Question 10

Between 1960 and 2010, the annual growth rate in percent per year was the highest in

Accepted Answer

A)  China. 
B)  United States. 
C)  Brazil. 
D)  Singapore. 
E)  South Korea. 
A)  China. 
B)  United States. 
C)  Brazil. 
D)  Singapore. 
E)  South Korea.

Question 11

Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors. Evaluate the Chilean policies during that decade.

Accepted Answer

Students should refer to the d

Question 12

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

Accepted Answer

A)  Argentina 
B)  Brazil 
C)  Chile 
D)  Colombia 
E)  Mexico 
A)  Argentina 
B)  Brazil 
C)  Chile 
D)  Colombia 
E)  Mexico

Question 13

What do you think about dollarization?

Accepted Answer

This is an open question. The answer is

Question 14

Write an essay on the importance of a sound banking system in developing countries.

Accepted Answer

See for example the vivid exam

Question 15

How was South Korea able to become one of the East Asian Economic Miracles?

Accepted Answer

South Korea was able to become one of th

Question 16

In developing economies, national saving is often ________ relative to developed economies.

Accepted Answer

A)  high 
B)  the same 
C)  hard to tell 
D)  low 
E)  low for the very poor countries and high for the more developed 
A)  high 
B)  the same 
C)  hard to tell 
D)  low 
E)  low for the very poor countries and high for the more developed

Question 17

What explains the sharply divergent long-run growth patterns?

Accepted Answer

The answer lies in the economi

Question 18

Compared with industrialized economies, most developing countries are poor in the factors of production essential to modern industry. These factors are

Accepted Answer

A)  capital and skilled labor. 
B)  capital and unskilled labor. 
C)  fertile land and unskilled labor. 
D)  fertile land and skilled labor. 
E)  water and capital. 
A)  capital and skilled labor. 
B)  capital and unskilled labor. 
C)  fertile land and unskilled labor. 
D)  fertile land and skilled labor. 
E)  water and capital.

Question 19

The real resource a government earns when it prints money and spends it on goods and services is called

Accepted Answer

A)  seigniorage. 
B)  control of capital movements by limiting foreign exchange transactions. 
C)  pure profits. 
D)  inflation profits. 
E)  greenback. 
A)  seigniorage. 
B)  control of capital movements by limiting foreign exchange transactions. 
C)  pure profits. 
D)  inflation profits. 
E)  greenback.

Question 20

The $50 billion emergency loan orchestrated by the U.S. Treasury and the IMF to Mexico in 1994

Accepted Answer

A)  was a disastrous policy for Mexico. 
B)  avoided a disaster to the Mexican economy. 
C)  did not affect Mexico in the short run. 
D)  did not affect Mexico in the long run. 
E)  was ineffective both in the short and long runs. 
A)  was a disastrous policy for Mexico. 
B)  avoided a disaster to the Mexican economy. 
C)  did not affect Mexico in the short run. 
D)  did not affect Mexico in the long run. 
E)  was ineffective both in the short and long runs.

Exam 22: Developing Countries: Growth, Crisis, and Reform

Why is China's currency undervalued?

The relationship between annual real per-capita GDP and corruption across countries has been found to be

In general, the development of underground economic activity ________ economic efficiency

The problem of moral hazard has led

Compare currency board to conventional fixed exchange rate.

The per-capita GNP of the industrial group is about ________ times that of the upper middle-income countries.

Most developing countries have tried to

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

For many developing countries, natural resources or agricultural commodities make up ________ share of exports

Between 1960 and 2010, the annual growth rate in percent per year was the highest in

Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors. Evaluate the Chilean policies during that decade.

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

What do you think about dollarization?

Write an essay on the importance of a sound banking system in developing countries.

How was South Korea able to become one of the East Asian Economic Miracles?

In developing economies, national saving is often ________ relative to developed economies.

What explains the sharply divergent long-run growth patterns?

Compared with industrialized economies, most developing countries are poor in the factors of production essential to modern industry. These factors are

The real resource a government earns when it prints money and spends it on goods and services is called

The $50 billion emergency loan orchestrated by the U.S. Treasury and the IMF to Mexico in 1994

Introduction

World Trade: an Overview

Labor Productivity and Comparative Advantage: the Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: an Asset Approach

Money, Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: an Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

Filters