Question 1

The acquisition of more than 10 percent of the outstanding shares in a company in another country is

Accepted Answer

A) foreign direct investment. 
B) foreign direct acquisition. 
C) portfolio investment. 
D) portfolio acquisition. 
A) foreign direct investment. 
B) foreign direct acquisition. 
C) portfolio investment. 
D) portfolio acquisition.

Question 2

Dead capital refers to

Accepted Answer

A) a capital resource that lacks clear title ownership. 
B) a capital resource whose owner is deceased. 
C) a capital resource jointly owned by more than one person. 
D) a capital resource that has no more useful life. 
A) a capital resource that lacks clear title ownership. 
B) a capital resource whose owner is deceased. 
C) a capital resource jointly owned by more than one person. 
D) a capital resource that has no more useful life.

Question 3

Which of the following is TRUE about the World Bank?

Accepted Answer

A) It is a multinational agency that specializes in development loans. 
B) It is a U.S. agency that specializes in development loans. 
C) It is a U.N. sponsored agency that specializes in development loans. 
D) It is made up of all central banks in the world. 
A) It is a multinational agency that specializes in development loans. 
B) It is a U.S. agency that specializes in development loans. 
C) It is a U.N. sponsored agency that specializes in development loans. 
D) It is made up of all central banks in the world.

Question 4

When a nation's currency suddenly loses value, the ________ may step in to buy the afflicted currency.

Accepted Answer

A) World Bank 
B) International Monetary Fund 
C) Federal Reserve Bank 
D) United Nations 
A) World Bank 
B) International Monetary Fund 
C) Federal Reserve Bank 
D) United Nations

Question 5

The International Monetary Fund

Accepted Answer

A) is a central bank like the Federal Reserve System. 
B) is the bank that causes international financial crisis when the reserves are too high. 
C) is a multinational agency that specializes in making loans to promote long-term development and growth in developing countries. 
D) is a multinational organization that aims to promote world economic growth through more financial stability. 
A) is a central bank like the Federal Reserve System. 
B) is the bank that causes international financial crisis when the reserves are too high. 
C) is a multinational agency that specializes in making loans to promote long-term development and growth in developing countries. 
D) is a multinational organization that aims to promote world economic growth through more financial stability.

Question 6

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

Accepted Answer

A) portfolio investment. 
B) gross private international investment. 
C) foreign direct investment. 
D) majority investment. 
A) portfolio investment. 
B) gross private international investment. 
C) foreign direct investment. 
D) majority investment.

Question 7

If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will

Accepted Answer

A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase or decrease depending. 
A) increase. 
B) decrease. 
C) remain unchanged. 
D) increase or decrease depending.

Question 8

The International Monetary Fund was created to achieve each of the following goals EXCEPT

Accepted Answer

A) lend funds to countries with international payment problems. 
B) lend funds to large government infrastructure projects. 
C) monitor and offer advice on the exchange rate policies of member nations. 
D) encourage free convertibility of the currencies of member nations. 
A) lend funds to countries with international payment problems. 
B) lend funds to large government infrastructure projects. 
C) monitor and offer advice on the exchange rate policies of member nations. 
D) encourage free convertibility of the currencies of member nations.

Question 9

The primary function of the International Monetary Fund is

Accepted Answer

A) to provide loans only to private firms in developing countries. 
B) to make direct, irrevocable transfers of funds from wealthy nations to poor nations. 
C) to lend solely on the basis of a nation's relative poverty. 
D) to make loans aimed at promoting global stability and hence growth. 
A) to provide loans only to private firms in developing countries. 
B) to make direct, irrevocable transfers of funds from wealthy nations to poor nations. 
C) to lend solely on the basis of a nation's relative poverty. 
D) to make loans aimed at promoting global stability and hence growth.

Question 10

If the government of a developing country is having difficulty selling bonds to build an irrigation system, it could go to the

Accepted Answer

A) World Bank. 
B) Federal Reserve Bank. 
C) United Nations International Bank. 
D) International Monetary Organization. 
A) World Bank. 
B) Federal Reserve Bank. 
C) United Nations International Bank. 
D) International Monetary Organization.

Question 11

Define what dead capital is and why economists are concerned with its existence.

Accepted Answer

Dead capital is when capital resources l

Question 12

If high level of corruption in a country deters foreign investment in worthy projects, this is known as

Accepted Answer

A) portfolio investment. 
B) moral hazard. 
C) foreign direct investment. 
D) adverse selection. 
A) portfolio investment. 
B) moral hazard. 
C) foreign direct investment. 
D) adverse selection.

Question 13

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

Accepted Answer

A) make loans to the riskiest nations so that private investors will not be tempted to take a risk. 
B) loan only to countries that have free elections. 
C) not make loans to risky nations because there is a high demand for funds from safer nations. 
D) impose tougher preconditions on borrowers. 
A) make loans to the riskiest nations so that private investors will not be tempted to take a risk. 
B) loan only to countries that have free elections. 
C) not make loans to risky nations because there is a high demand for funds from safer nations. 
D) impose tougher preconditions on borrowers.

Question 14

A multinational agency that specializes in making loans to a larger number of developing nations to promote long-term development and growth is

Accepted Answer

A) the International Bank. 
B) the World Bank. 
C) the International Monetary Fund. 
D) the World Monetary Fund. 
A) the International Bank. 
B) the World Bank. 
C) the International Monetary Fund. 
D) the World Monetary Fund.

Question 15

Which of the following is NOT a function of the International Monetary Fund?

Accepted Answer

A) serve as lender of last resort for national governments 
B) administer an international foreign exchange system 
C) establish the SDR system nations utilize to settle international payment obligations 
D) establish and administer each nation's fiscal and monetary policies 
A) serve as lender of last resort for national governments 
B) administer an international foreign exchange system 
C) establish the SDR system nations utilize to settle international payment obligations 
D) establish and administer each nation's fiscal and monetary policies

Question 16

One of the most significant barriers to economic growth in the world's poorest nations is

Accepted Answer

A) environmental issues. 
B) political freedom. 
C) dead capital. 
D) U.S. government interference. 
A) environmental issues. 
B) political freedom. 
C) dead capital. 
D) U.S. government interference.

Question 17

The term "economic freedom" means

Accepted Answer

A) the right to own private property. 
B) the right to trade goods and services. 
C) the right to own financial assets. 
D) all the above. 
A) the right to own private property. 
B) the right to trade goods and services. 
C) the right to own financial assets. 
D) all the above.

Question 18

The three sources of private direct investment in developing nations are

Accepted Answer

A) bank loans, government loans, and Eurobond issues. 
B) bank loans, portfolio investments, and foreign direct investments. 
C) portfolio loans, IMF loans, and government loans. 
D) foreign direct investment, government loans, and Eurobond issues. 
A) bank loans, government loans, and Eurobond issues. 
B) bank loans, portfolio investments, and foreign direct investments. 
C) portfolio loans, IMF loans, and government loans. 
D) foreign direct investment, government loans, and Eurobond issues.

Question 19

Moral hazard is a barrier to financing global growth because

Accepted Answer

A) firms sometimes have trouble determining whether they need funds or not. 
B) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms. 
C) there is the possibility that the funds are used for riskier behavior than the lender agreed to. 
D) of the differences between financing using loans, portfolio investment and foreign direct investment. 
A) firms sometimes have trouble determining whether they need funds or not. 
B) if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms. 
C) there is the possibility that the funds are used for riskier behavior than the lender agreed to. 
D) of the differences between financing using loans, portfolio investment and foreign direct investment.

Question 20

Dead capital is

Accepted Answer

A) unlikely to have any productive use. 
B) unlikely to be applied to its most efficient use. 
C) useful only if employed in a labor-intensive production process. 
D) useful only if employed in a capital-intensive production process. 
A) unlikely to have any productive use. 
B) unlikely to be applied to its most efficient use. 
C) useful only if employed in a labor-intensive production process. 
D) useful only if employed in a capital-intensive production process.

The acquisition of more than 10 percent of the outstanding shares in a company in another country is

Dead capital refers to

Which of the following is TRUE about the World Bank?

When a nation's currency suddenly loses value, the ________ may step in to buy the afflicted currency.

The International Monetary Fund

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will

The International Monetary Fund was created to achieve each of the following goals EXCEPT

The primary function of the International Monetary Fund is

If the government of a developing country is having difficulty selling bonds to build an irrigation system, it could go to the

Define what dead capital is and why economists are concerned with its existence.

If high level of corruption in a country deters foreign investment in worthy projects, this is known as

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

A multinational agency that specializes in making loans to a larger number of developing nations to promote long-term development and growth is

Which of the following is NOT a function of the International Monetary Fund?

One of the most significant barriers to economic growth in the world's poorest nations is

The term "economic freedom" means

The three sources of private direct investment in developing nations are

Moral hazard is a barrier to financing global growth because

Dead capital is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 17: Policies and Prospects for Global Economic Growth

The acquisition of more than 10 percent of the outstanding shares in a company in another country is

Dead capital refers to

Which of the following is TRUE about the World Bank?

When a nation's currency suddenly loses value, the ________ may step in to buy the afflicted currency.

The International Monetary Fund

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

If real per capita Gross Domestic Product (GDP)grows at a constant annual rate of 4 percent and the annual population growth rate increases from 1 percent to 2 percent, the annual rate of growth of per capita real GDP will

The International Monetary Fund was created to achieve each of the following goals EXCEPT

The primary function of the International Monetary Fund is

If the government of a developing country is having difficulty selling bonds to build an irrigation system, it could go to the

Define what dead capital is and why economists are concerned with its existence.

If high level of corruption in a country deters foreign investment in worthy projects, this is known as

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

A multinational agency that specializes in making loans to a larger number of developing nations to promote long-term development and growth is

Which of the following is NOT a function of the International Monetary Fund?

One of the most significant barriers to economic growth in the world's poorest nations is

The term "economic freedom" means

The three sources of private direct investment in developing nations are

Moral hazard is a barrier to financing global growth because

Dead capital is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters