Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is NOT a true statement about IMF lending?

Accepted Answer

A) The IMF can usually determine the difference between national crises and those likely to cause system-wide problems. 
B) Limits on borrowing have not kept up with the growth of national economies. 
C) The IMF does not have the funds to provide the support that a large economy might need. 
D) Proposals for lending expansion suggest greater IMF intervention if it can stop crises faster. 
A) The IMF can usually determine the difference between national crises and those likely to cause system-wide problems. 
B) Limits on borrowing have not kept up with the growth of national economies. 
C) The IMF does not have the funds to provide the support that a large economy might need. 
D) Proposals for lending expansion suggest greater IMF intervention if it can stop crises faster.

Question 3

International financial flows have 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 4

Which of the following may NOT help avoid a financial crisis?

Accepted Answer

A) Maintaining credible and sustainable fiscal policies 
B) Regulation and supervision of the financial system 
C) Immediately bailing out financial intermediaries and standing ready to bail out others in case a financial crisis occurs 
D) Maintaining credible and sustainable monetary policies 
A) Maintaining credible and sustainable fiscal policies 
B) Regulation and supervision of the financial system 
C) Immediately bailing out financial intermediaries and standing ready to bail out others in case a financial crisis occurs 
D) Maintaining credible and sustainable monetary policies

Question 5

With crises caused by macroeconomic imbalances,

Accepted Answer

A) it is usually difficult to avoid a recession. 
B) austerity programs are not needed. 
C) expansionary policies can be used to correct the crisis. 
D) the money supply should be increased. 
A) it is usually difficult to avoid a recession. 
B) austerity programs are not needed. 
C) expansionary policies can be used to correct the crisis. 
D) the money supply should be increased.

Question 6

Although financial crises can be unpredictable,they are usually preceded by identifiable vulnerabilities.

Accepted Answer

A) True 
 B)False

Question 7

How does a weak financial sector intensify the problems created by volatile capital flows?

Accepted Answer

For example,consider a banking sector th

Question 8

The Basel Capital Accord does NOT include

Accepted Answer

A) requiring bank owners to invest into and have some capital ownership in the banks they own. 
B) supervision of banks by an oversight board. 
C) information disclosure designed to encourage market discipline. 
D) denying access to foreign capital by a country that defaults on its international loans. 
A) requiring bank owners to invest into and have some capital ownership in the banks they own. 
B) supervision of banks by an oversight board. 
C) information disclosure designed to encourage market discipline. 
D) denying access to foreign capital by a country that defaults on its international loans.

Question 9

How did the vulnerabilities in Asian economies lead to the Asian financial crisis of 1997-1998.

Accepted Answer

First,a number of Asian countries had la

Question 10

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 11

All of the following are symptoms of definite and identifiable macroeconomic imbalances except

Accepted Answer

A) large budget deficits. 
B) an overvalued currency. 
C) a current account deficit. 
D) the discovery of emerging markets by financial investors who want to diversify their portfolios. 
A) large budget deficits. 
B) an overvalued currency. 
C) a current account deficit. 
D) the discovery of emerging markets by financial investors who want to diversify their portfolios.

Question 12

Which one of the following countries refused to accept the IMF conditions during the East Asian financial crisis?

Accepted Answer

A) South Korea 
B) Malaysia 
C) Thailand 
D) Singapore 
A) South Korea 
B) Malaysia 
C) Thailand 
D) Singapore

Question 13

Austerity programs involving budget cuts and higher interest rates may not be politically feasible.

Accepted Answer

A) True 
 B)False

Question 14

The main policy advice given by the IMF to East Asian countries facing the financial crises of 1997/1998 was

Accepted Answer

A) raising their domestic interest rates to stabilize the collapsing currencies. 
B) using their monetary and fiscal policies alone. 
C) use capital controls. 
D) adopting a flexible exchange rate system. 
A) raising their domestic interest rates to stabilize the collapsing currencies. 
B) using their monetary and fiscal policies alone. 
C) use capital controls. 
D) adopting a flexible exchange rate system.

Question 15

Current research suggests that countries that adopt a pegged exchange rate may be more vulnerable to an exchange rate crisis.

Accepted Answer

A) True 
 B)False

Question 16

With regard to the IMF,"mission creep" means that

Accepted Answer

A) the IMF was making loans to nonmember countries. 
B) the IMF had expanded its lending to an inappropriate level. 
C) the IMF had taken on extended responsibilities that it should be authorized to perform. 
D) the IMF had taken on responsibilities for which it was not suited. 
A) the IMF was making loans to nonmember countries. 
B) the IMF had expanded its lending to an inappropriate level. 
C) the IMF had taken on extended responsibilities that it should be authorized to perform. 
D) the IMF had taken on responsibilities for which it was not suited.

Question 17

Small devaluations are usually sufficient to stem capital flight.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following was NOT one of the causes of the Asian financial crises of 1997 and 1998?

Accepted Answer

A) A current account deficit and financial account surpluses 
B) The use of exports as an engine of economic growth by the countries involved 
C) China's 1994 devaluation of its fixed exchange rate 
D) The appreciation of the U.S. dollar and depreciation of the Japanese yen 
A) A current account deficit and financial account surpluses 
B) The use of exports as an engine of economic growth by the countries involved 
C) China's 1994 devaluation of its fixed exchange rate 
D) The appreciation of the U.S. dollar and depreciation of the Japanese yen

Question 19

Before the 1970s,IMF conditionality focused primarily on correcting the immediate source of the problem.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is a true statement about crises caused by volatile capital flows?

Accepted Answer

A) Volatile capital flows rarely cause contagion effects. 
B) Technological advances have increased the volatility of capital flows. 
C) Exchange rates appreciate when there are capital outflows. 
D) Budget deficits decrease when there are capital outflows. 
A) Volatile capital flows rarely cause contagion effects. 
B) Technological advances have increased the volatility of capital flows. 
C) Exchange rates appreciate when there are capital outflows. 
D) Budget deficits decrease when there are capital outflows.

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

Which of the following is NOT a true statement about IMF lending?

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

Which of the following may NOT help avoid a financial crisis?

With crises caused by macroeconomic imbalances,

Although financial crises can be unpredictable,they are usually preceded by identifiable vulnerabilities.

How does a weak financial sector intensify the problems created by volatile capital flows?

The Basel Capital Accord does NOT include

How did the vulnerabilities in Asian economies lead to the Asian financial crisis of 1997-1998.

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 symptoms of definite and identifiable macroeconomic imbalances except

Which one of the following countries refused to accept the IMF conditions during the East Asian financial crisis?

Austerity programs involving budget cuts and higher interest rates may not be politically feasible.

The main policy advice given by the IMF to East Asian countries facing the financial crises of 1997/1998 was

Current research suggests that countries that adopt a pegged exchange rate may be more vulnerable to an exchange rate crisis.

With regard to the IMF,"mission creep" means that

Small devaluations are usually sufficient to stem capital flight.

Which of the following was NOT one of the causes of the Asian financial crises of 1997 and 1998?

Before the 1970s,IMF conditionality focused primarily on correcting the immediate source of the problem.

Which of the following is a true statement about crises caused by volatile capital flows?

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

China and India in the World Economy

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Exam 12: International Financial Crises

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

Which of the following is NOT a true statement about IMF lending?

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

Which of the following may NOT help avoid a financial crisis?

With crises caused by macroeconomic imbalances,

Although financial crises can be unpredictable,they are usually preceded by identifiable vulnerabilities.

How does a weak financial sector intensify the problems created by volatile capital flows?

The Basel Capital Accord does NOT include

How did the vulnerabilities in Asian economies lead to the Asian financial crisis of 1997-1998.

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 symptoms of definite and identifiable macroeconomic imbalances except

Which one of the following countries refused to accept the IMF conditions during the East Asian financial crisis?

Austerity programs involving budget cuts and higher interest rates may not be politically feasible.

The main policy advice given by the IMF to East Asian countries facing the financial crises of 1997/1998 was

Current research suggests that countries that adopt a pegged exchange rate may be more vulnerable to an exchange rate crisis.

With regard to the IMF,"mission creep" means that

Small devaluations are usually sufficient to stem capital flight.

Which of the following was NOT one of the causes of the Asian financial crises of 1997 and 1998?

Before the 1970s,IMF conditionality focused primarily on correcting the immediate source of the problem.

Which of the following is a true statement about crises caused by volatile capital flows?

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

China and India in the World Economy

Filters