Question 1

Capital controls for banks

Accepted Answer

A) reduce the chance of bank failures. 
B) have been demonstrated to be effective in preventing financial crises. 
C) increase the problem of moral hazard. 
D) increase the profitability of banks. 
A) reduce the chance of bank failures. 
B) have been demonstrated to be effective in preventing financial crises. 
C) increase the problem of moral hazard. 
D) increase the profitability of banks.

Question 2

Exchange rates and banking systems are often the variables through which the contagion effects of a crisis are spread from one country to another.

Accepted Answer

A) True 
 B)False

Question 3

All of the following involve a moral hazard problem except

Accepted Answer

A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto. 
B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. 
C) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. 
D) membership in FDIC (Federal Deposit Insurance Corporation)by your local bank. 
A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto. 
B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. 
C) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. 
D) membership in FDIC (Federal Deposit Insurance Corporation)by your local bank.

Question 4

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) makes loans to all who require them. 
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) makes loans to all who require them.

Question 5

Explain how IMF conditionality has changed over time.

Accepted Answer

Before the 1970s,IMF conditionality focu

Question 6

Deficits financed by borrowed money lead to inflation,and in a fixed or crawling peg exchange rate system,this leads to the real exchange rate being undervalued.

Accepted Answer

A) True 
 B)False

Question 7

A large and growing current account deficit can be an indicator of a potential crisis.

Accepted Answer

A) True 
 B)False

Question 8

The most common type of macroeconomic imbalance is overly expansionary fiscal policies that create large government budget deficits,often financed by a high growth rate of the money supply.

Accepted Answer

A) True 
 B)False

Question 9

Financial capital is highly volatile,and technological advances have reinforced this volatility.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Capital controls for banks

Exchange rates and banking systems are often the variables through which the contagion effects of a crisis are spread from one country to another.

All of the following involve a moral hazard problem except

A lender of last resort

Explain how IMF conditionality has changed over time.

Deficits financed by borrowed money lead to inflation,and in a fixed or crawling peg exchange rate system,this leads to the real exchange rate being undervalued.

A large and growing current account deficit can be an indicator of a potential crisis.

The most common type of macroeconomic imbalance is overly expansionary fiscal policies that create large government budget deficits,often financed by a high growth rate of the money supply.

Financial capital is highly volatile,and technological advances have reinforced this volatility.

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

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

Exam 12: International Financial Crises

Capital controls for banks

Exchange rates and banking systems are often the variables through which the contagion effects of a crisis are spread from one country to another.

All of the following involve a moral hazard problem except

A lender of last resort

Explain how IMF conditionality has changed over time.

Deficits financed by borrowed money lead to inflation,and in a fixed or crawling peg exchange rate system,this leads to the real exchange rate being undervalued.

A large and growing current account deficit can be an indicator of a potential crisis.

The most common type of macroeconomic imbalance is overly expansionary fiscal policies that create large government budget deficits,often financed by a high growth rate of the money supply.

Financial capital is highly volatile,and technological advances have reinforced this volatility.

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

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