Question 1

Both the International Monetary Fund and the World Bank were established

Accepted Answer

A) at the end of World War I. 
B) at the end of World War II. 
C) in the 1960s. 
D) in the 1970s. 
A) at the end of World War I. 
B) at the end of World War II. 
C) in the 1960s. 
D) in the 1970s.

Question 2

Which of the following statements is TRUE?

Accepted Answer

A) All nations that belong to the International Monetary Fund have equal voting power. 
B) The voting power of a nation in the International Monetary Fund is determined by its quota subscription. 
C) The voting power of a nation in the International Monetary Fund is called special drawing rights. 
D) The voting procedure in the International Fund is determined by the World Bank. 
A) All nations that belong to the International Monetary Fund have equal voting power. 
B) The voting power of a nation in the International Monetary Fund is determined by its quota subscription. 
C) The voting power of a nation in the International Monetary Fund is called special drawing rights. 
D) The voting procedure in the International Fund is determined by the World Bank.

Question 3

Over the past decade, a nation's real Gross Domestic Product (GDP)grew at a constant rate of 10 percent per year while its population grew 8 percent annually. Forecasters predict that during the coming decade, real GDP will continue to grow 10 percent annually, but the population growth rate is expected to drop to 6 percent annually. If the forecasters are correct, which of the following will be TRUE?

Accepted Answer

A) The annual rate of growth of per capita real GDP will decline from 4 percent to 2 percent. 
B) The annual rate of growth of per capita real GDP will decline from 2 percent to 1 percent. 
C) The annual rate of growth of per capita real GDP will increase from 2 percent to 4 percent. 
D) The annual rate of growth of per capita real GDP will increase from 2 percent to 6 percent. 
A) The annual rate of growth of per capita real GDP will decline from 4 percent to 2 percent. 
B) The annual rate of growth of per capita real GDP will decline from 2 percent to 1 percent. 
C) The annual rate of growth of per capita real GDP will increase from 2 percent to 4 percent. 
D) The annual rate of growth of per capita real GDP will increase from 2 percent to 6 percent.

Question 4

If you invest in a foreign company by buying 8 percent of its shares of stock, you have engaged in

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 5

Dead capital is most likely to exist when

Accepted Answer

A) there are restrictions on imports. 
B) there are restrictions on exports. 
C) property rights are well-defined. 
D) residents of a country face barriers to establishing legal ownership of resources. 
A) there are restrictions on imports. 
B) there are restrictions on exports. 
C) property rights are well-defined. 
D) residents of a country face barriers to establishing legal ownership of resources.

Question 6

An international financial crisis is most often caused by

Accepted Answer

A) a nation's central bank lowering domestic interest rates. 
B) a government refusing to pay its dues to the United Nations. 
C) foreign investments and loans being withdrawn from a nation. 
D) a drop in the value of the U.S. dollar. 
A) a nation's central bank lowering domestic interest rates. 
B) a government refusing to pay its dues to the United Nations. 
C) foreign investments and loans being withdrawn from a nation. 
D) a drop in the value of the U.S. dollar.

Question 7

The tolerance of bribe-taking by government officials

Accepted Answer

A) reduces economic uncertainty because all investors are aware of the practice. 
B) reduces economic efficiency because rules governing property rights are not regularly enforced. 
C) reduces government expenditures because public employees can be paid less. 
D) reduces the need for government to impose taxes on poor people. 
A) reduces economic uncertainty because all investors are aware of the practice. 
B) reduces economic efficiency because rules governing property rights are not regularly enforced. 
C) reduces government expenditures because public employees can be paid less. 
D) reduces the need for government to impose taxes on poor people.

Question 8

When a country has a large amount of dead capital

Accepted Answer

A) there is too much political freedom. 
B) there is a large amount of economic growth. 
C) large amounts of capital will be inefficiently employed. 
D) a country's exports increase. 
A) there is too much political freedom. 
B) there is a large amount of economic growth. 
C) large amounts of capital will be inefficiently employed. 
D) a country's exports increase.

Question 9

Which of the following represents dead capital?

Accepted Answer

A) capital that has worn out over time 
B) capital that has become obsolete 
C) capital that lacks clear title of ownership 
D) none of the above 
A) capital that has worn out over time 
B) capital that has become obsolete 
C) capital that lacks clear title of ownership 
D) none of the above

Question 10

The purchase of less than 10 percent of the shares of ownership in a company in another country is known as

Accepted Answer

A) a hostile takeover. 
B) an ineffective method for encouraging economic growth. 
C) foreign direct investment. 
D) portfolio investment. 
A) a hostile takeover. 
B) an ineffective method for encouraging economic growth. 
C) foreign direct investment. 
D) portfolio investment.

Question 11

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?

Accepted Answer

A) 1 percent 
B) 3 percent 
C) 4 percent 
D) 87 percent 
A) 1 percent 
B) 3 percent 
C) 4 percent 
D) 87 percent

Question 12

Special drawing rights are

Accepted Answer

A) the reserves held by members of the European Union to back their accounts with the European Central Bank. 
B) credit accounts held by individual stockholders with portfolio investments in other countries. 
C) international units of account held by the International Monetary Fund for member countries. 
D) the estimated level of oil reserves remaining in OPEC countries. 
A) the reserves held by members of the European Union to back their accounts with the European Central Bank. 
B) credit accounts held by individual stockholders with portfolio investments in other countries. 
C) international units of account held by the International Monetary Fund for member countries. 
D) the estimated level of oil reserves remaining in OPEC countries.

Question 13

Each country's IMF quota subscription is determined by

Accepted Answer

A) the relative size of its national income. 
B) the size of its population. 
C) the size of world trade. 
D) how much a country wants to contribute. 
A) the relative size of its national income. 
B) the size of its population. 
C) the size of world trade. 
D) how much a country wants to contribute.

Question 14

Political freedom seems to be ________ important to growth than economic freedom.

Accepted Answer

A) less 
B) more 
C) equally 
D) critically 
A) less 
B) more 
C) equally 
D) critically

Question 15

Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?

Accepted Answer

A) -1 percent 
B) 1 percent 
C) 9 percent 
D) -9 percent 
A) -1 percent 
B) 1 percent 
C) 9 percent 
D) -9 percent

Question 16

For foreign direct investment to occur, the purchase has to be more than

Accepted Answer

A) 2 percent but less than 5 percent of shares in a business located abroad. 
B) 5 percent but less than 10 percent of shares in a business located abroad. 
C) 8 percent but less than 10 percent of shares in a business located abroad. 
D) 10 percent of shares in a business located abroad. 
A) 2 percent but less than 5 percent of shares in a business located abroad. 
B) 5 percent but less than 10 percent of shares in a business located abroad. 
C) 8 percent but less than 10 percent of shares in a business located abroad. 
D) 10 percent of shares in a business located abroad.

Question 17

The World Bank has extended a loan to Country X to build a new toll road and counts on the repayment of the loan from the collected tolls. After the funds have been transferred to the country, the government decides to spend the money to build a new presidential palace. This is an example of

Accepted Answer

A) hostile selection. 
B) adverse selection. 
C) moral hazard. 
D) government risk. 
A) hostile selection. 
B) adverse selection. 
C) moral hazard. 
D) government risk.

Question 18

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

Accepted Answer

A) to supervise exchange-rate practices of member countries. 
B) to help finance economic development in poor countries. 
C) to encourage convertibility of member countries' currencies. 
D) to lend funds to countries having difficulties meeting their international payment obligations. 
A) to supervise exchange-rate practices of member countries. 
B) to help finance economic development in poor countries. 
C) to encourage convertibility of member countries' currencies. 
D) to lend funds to countries having difficulties meeting their international payment obligations.

Question 19

The World Bank

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 20

The multinational organization that aims to promote world economic growth by fostering financial stability is the

Accepted Answer

A) International Monetary Fund. 
B) World Trade Organization. 
C) United Nations. 
D) World Bank. 
A) International Monetary Fund. 
B) World Trade Organization. 
C) United Nations. 
D) World Bank.

Both the International Monetary Fund and the World Bank were established

Which of the following statements is TRUE?

If you invest in a foreign company by buying 8 percent of its shares of stock, you have engaged in

Dead capital is most likely to exist when

An international financial crisis is most often caused by

The tolerance of bribe-taking by government officials

When a country has a large amount of dead capital

Which of the following represents dead capital?

The purchase of less than 10 percent of the shares of ownership in a company in another country is known as

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?

Special drawing rights are

Each country's IMF quota subscription is determined by

Political freedom seems to be ________ important to growth than economic freedom.

Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?

For foreign direct investment to occur, the purchase has to be more than

The World Bank has extended a loan to Country X to build a new toll road and counts on the repayment of the loan from the collected tolls. After the funds have been transferred to the country, the government decides to spend the money to build a new presidential palace. This is an example of

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

The World Bank

The multinational organization that aims to promote world economic growth by fostering financial stability is the

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

Both the International Monetary Fund and the World Bank were established

Which of the following statements is TRUE?

If you invest in a foreign company by buying 8 percent of its shares of stock, you have engaged in

Dead capital is most likely to exist when

An international financial crisis is most often caused by

The tolerance of bribe-taking by government officials

When a country has a large amount of dead capital

Which of the following represents dead capital?

The purchase of less than 10 percent of the shares of ownership in a company in another country is known as

What is the annual rate of growth of per capita real GDP if real GDP grows at a constant rate of 4 percent per year and the annual rate of population growth is 3 percent?

Special drawing rights are

Each country's IMF quota subscription is determined by

Political freedom seems to be ________ important to growth than economic freedom.

Country X has experienced GDP growth of 4 percent and a population growth of 5 percent. What is this country's growth of per capita real GDP?

For foreign direct investment to occur, the purchase has to be more than

The World Bank has extended a loan to Country X to build a new toll road and counts on the repayment of the loan from the collected tolls. After the funds have been transferred to the country, the government decides to spend the money to build a new presidential palace. This is an example of

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

The World Bank

The multinational organization that aims to promote world economic growth by fostering financial stability is the

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