Question 1

What event started the Asian financial crisis in 1997?

Accepted Answer

A)  Indonesia's inability to pay its debts 
B)  devaluation of Indonesia's currency 
C)  Thailand's inability to pay its debts 
D)  devaluation of Thailand's currency 
E)  devaluation of Malaysia's currency 
A)  Indonesia's inability to pay its debts 
B)  devaluation of Indonesia's currency 
C)  Thailand's inability to pay its debts 
D)  devaluation of Thailand's currency 
E)  devaluation of Malaysia's currency

Question 2

Explain the theory behind convergence and why it is a "deceptively simple" theory.

Accepted Answer

Convergence is the tendency for gaps bet

Question 3

The term contagion refers to

Accepted Answer

A)  a government's complete control over it's banking system. 
B)  a drop in interest rates across industrialized countries. 
C)  the vulnerability of healthy economies to crises generated by events elsewhere. 
D)  a directed attack on one market by a foreign market. 
E)  a side effect of international trade. 
A)  a government's complete control over it's banking system. 
B)  a drop in interest rates across industrialized countries. 
C)  the vulnerability of healthy economies to crises generated by events elsewhere. 
D)  a directed attack on one market by a foreign market. 
E)  a side effect of international trade.

Question 4

Which of the following is a reason that developing countries are running large surpluses?

Accepted Answer

A)  They are required to do so by IMF. 
B)  They have defaulted on international loans. 
C)  They have pegged exchange rates and thus the growth of exports must drive surplus up. 
D)  They have a strong desire to accumulate international reserves to protect against a sudden stop of capital inflows. 
E)  They don't know how to manage their surpluses. 
A)  They are required to do so by IMF. 
B)  They have defaulted on international loans. 
C)  They have pegged exchange rates and thus the growth of exports must drive surplus up. 
D)  They have a strong desire to accumulate international reserves to protect against a sudden stop of capital inflows. 
E)  They don't know how to manage their surpluses.

Question 5

Economists Eichengreen and Hausmann coined the phrase original sin to describe developing countries inability to borrow in their own currencies. Where do they believe that this inability comes from?
 What are other beliefs on this topic?

Accepted Answer

Eichengreen and Hausmann believe that th

Question 6

A currency board can ________ a country's ability to act as a lender of last resort.

Accepted Answer

A)  aggrandize 
B)  limit 
C)  enhance 
D)  offset 
E)  not affect 
A)  aggrandize 
B)  limit 
C)  enhance 
D)  offset 
E)  not affect

Question 7

Explain the basic macroeconomic policy trilemma for open economies.

Accepted Answer

Of three goals most countries

Question 8

In 1991, Argentina established a radical institutional reform after experiencing a decade marked by financial instability. This program was called the new Convertibility Law. What did this law do?

Accepted Answer

A)  made Argentina's currency fully convertible into Eurocurrency at a fixed rate 
B)  required that the monetary base be backed completely by U.S. dollars 
C)  placed limits on exports of commodities 
D)  made Argentina's currency fully convertible into U.S. dollars at a fixed rate and required that the monetary base be backed completely by gold or foreign currency 
E)  restricted risky international trade activity 
A)  made Argentina's currency fully convertible into Eurocurrency at a fixed rate 
B)  required that the monetary base be backed completely by U.S. dollars 
C)  placed limits on exports of commodities 
D)  made Argentina's currency fully convertible into U.S. dollars at a fixed rate and required that the monetary base be backed completely by gold or foreign currency 
E)  restricted risky international trade activity

Question 9

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Accepted Answer

When a country's liabilities are in the

Question 10

Average per-capita GDP in the richest, most prosperous economies is ________ times that of the average in the ________ economies.

Accepted Answer

A)  95, low (poorest) income 
B)  95, lower-middle income 
C)  73, lower-middle income 
D)  44, low (poorest) income 
E)  69, low (poorest) income 
A)  95, low (poorest) income 
B)  95, lower-middle income 
C)  73, lower-middle income 
D)  44, low (poorest) income 
E)  69, low (poorest) income

Question 11

Over the post-war era, poorer countries grew

Accepted Answer

A)  faster. 
B)  slower. 
C)  stayed the same. 
D)  grew faster, then grew slower. 
E)  No general tendency can be found. 
A)  faster. 
B)  slower. 
C)  stayed the same. 
D)  grew faster, then grew slower. 
E)  No general tendency can be found.

Question 12

Explain the extensive economic role of government within a developing country.

Accepted Answer

An open question. Students should includ

What event started the Asian financial crisis in 1997?

Explain the theory behind convergence and why it is a "deceptively simple" theory.

The term contagion refers to

Which of the following is a reason that developing countries are running large surpluses?

Economists Eichengreen and Hausmann coined the phrase original sin to describe developing countries inability to borrow in their own currencies. Where do they believe that this inability comes from? What are other beliefs on this topic?

A currency board can ________ a country's ability to act as a lender of last resort.

Explain the basic macroeconomic policy trilemma for open economies.

In 1991, Argentina established a radical institutional reform after experiencing a decade marked by financial instability. This program was called the new Convertibility Law. What did this law do?

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Average per-capita GDP in the richest, most prosperous economies is times that of the average in the economies.

Over the post-war era, poorer countries grew

Explain the extensive economic role of government within a developing country.

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

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

What event started the Asian financial crisis in 1997?

Explain the theory behind convergence and why it is a "deceptively simple" theory.

The term contagion refers to

Which of the following is a reason that developing countries are running large surpluses?

Economists Eichengreen and Hausmann coined the phrase original sin to describe developing countries inability to borrow in their own currencies. Where do they believe that this inability comes from? What are other beliefs on this topic?

A currency board can ________ a country's ability to act as a lender of last resort.

Explain the basic macroeconomic policy trilemma for open economies.

In 1991, Argentina established a radical institutional reform after experiencing a decade marked by financial instability. This program was called the new Convertibility Law. What did this law do?

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Average per-capita GDP in the richest, most prosperous economies is ________ times that of the average in the ________ economies.

Over the post-war era, poorer countries grew

Explain the extensive economic role of government within a developing country.

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

Average per-capita GDP in the richest, most prosperous economies is times that of the average in the economies.