Question 1

Why was the 1997-98 Asian financial crisis a surprise?

Accepted Answer

A) The East Asian countries suffering from the crisis had borrowed little international money before the crisis. 
B) The East Asian countries suffering from the crisis blamed international investors for their problems. 
C) The East Asian countries suffering from the crisis had been considered successful models of development. 
D) Creditor countries,like the United States,refused to help out their Asian allies when the crisis occurred. 
A) The East Asian countries suffering from the crisis had borrowed little international money before the crisis. 
B) The East Asian countries suffering from the crisis blamed international investors for their problems. 
C) The East Asian countries suffering from the crisis had been considered successful models of development. 
D) Creditor countries,like the United States,refused to help out their Asian allies when the crisis occurred. C

Question 2

Why is foreign direct investment sometimes controversial in developing countries?

Accepted Answer

A) People in developing countries prefer that their own multinational corporations invest domestically rather than in richer countries. 
B) Multinational corporations lend money to local governments at high interest rates. 
C) Developing countries think multinational corporations keep too much of the profit from their investments. 
D) Multinational corporations help developing countries develop infrastructure. 
A) People in developing countries prefer that their own multinational corporations invest domestically rather than in richer countries. 
B) Multinational corporations lend money to local governments at high interest rates. 
C) Developing countries think multinational corporations keep too much of the profit from their investments. 
D) Multinational corporations help developing countries develop infrastructure. C

Question 3

What event sparked the 1980s debt crisis?

Accepted Answer

A) The Mexican government announced it could not make its debt payment. 
B) The Soviet Union invaded Afghanistan,and all extra investment was used for defense spending. 
C) The U.S.Congress banned lending to Latin American countries. 
D) Ronald Reagan was elected president of the United States. 
A) The Mexican government announced it could not make its debt payment. 
B) The Soviet Union invaded Afghanistan,and all extra investment was used for defense spending. 
C) The U.S.Congress banned lending to Latin American countries. 
D) Ronald Reagan was elected president of the United States. A

Question 4

To which of the following countries did the Asian financial crisis of the 1990s spread?

Accepted Answer

A) Greece 
B) Canada 
C) Russia 
D) Nigeria 
A) Greece 
B) Canada 
C) Russia 
D) Nigeria

Question 5

Which of the following examples of migration would be best explained by the Heckscher-Ohlin theory?

Accepted Answer

A) An unskilled worker from El Salvador moving to the United States 
B) A computer engineer from India moving to the United States 
C) An unskilled worker from Germany moving to Greece 
D) A refugee from civil war in the Middle East moving to Europe 
A) An unskilled worker from El Salvador moving to the United States 
B) A computer engineer from India moving to the United States 
C) An unskilled worker from Germany moving to Greece 
D) A refugee from civil war in the Middle East moving to Europe

Question 6

Why is lending capital to foreign countries controversial in the lending countries?

Accepted Answer

A) Citizens resent banks making a profit on international loans. 
B) The profits from the loans are spread widely throughout the economy,which is opposed by the investors. 
C) Often when banks make bad loans,their governments bail out the banks with the taxpayers' money. 
D) The repayment of the loans requires austerity policies. 
A) Citizens resent banks making a profit on international loans. 
B) The profits from the loans are spread widely throughout the economy,which is opposed by the investors. 
C) Often when banks make bad loans,their governments bail out the banks with the taxpayers' money. 
D) The repayment of the loans requires austerity policies.

Question 7

The World Bank typically provides additional capital to:

Accepted Answer

A) developed countries at the market rate. 
B) developed countries at below the market rate. 
C) lesser developed countries at the market rate. 
D) lesser developed countries at below the market rate. 
A) developed countries at the market rate. 
B) developed countries at below the market rate. 
C) lesser developed countries at the market rate. 
D) lesser developed countries at below the market rate.

Question 8

How did trouble in the U.S.mortgage industry in 2008 lead to a sovereign debt crisis in Europe a few years later? What lessons can we draw from this about globalization and international finance?

Accepted Answer

Answers will vary.Students may discuss h

Question 9

Which of the following is a reason that international portfolio finance is considered beneficial for less developed countries?

Accepted Answer

A) Investors in capital-rich countries can provide better management of industries in less developed countries. 
B) Investors in capital-rich countries can get higher returns on their money. 
C) Capital-scarce countries have access to investment money from wealthier countries. 
D) Capital-scarce countries can use these loans to decrease their international debts. 
A) Investors in capital-rich countries can provide better management of industries in less developed countries. 
B) Investors in capital-rich countries can get higher returns on their money. 
C) Capital-scarce countries have access to investment money from wealthier countries. 
D) Capital-scarce countries can use these loans to decrease their international debts.

Question 10

Why have financial and debt crises been recurring features of the global economy?

Accepted Answer

Answers will vary.Students may discuss t

Question 11

What leverage over foreign direct investment,if any,does a developing country have over a multinational corporation?

Accepted Answer

Answers will vary.Students may discuss w

Question 12

Which organization was set up in the 1930s and is composed of the world's principal central banks?

Accepted Answer

A) United Nations 
B) World Bank 
C) International Monetary Fund 
D) Bank for International Settlements 
A) United Nations 
B) World Bank 
C) International Monetary Fund 
D) Bank for International Settlements

Question 13

The financial crises of the late 2000s and early 2010s primarily affected what type of country?

Accepted Answer

A) Autocratic 
B) Underdeveloped 
C) Autarkic 
D) Developed 
A) Autocratic 
B) Underdeveloped 
C) Autarkic 
D) Developed

Question 14

Why is there concessional finance?

Accepted Answer

A) If poor countries do not offer tax breaks,multinational corporations will build their factories in other countries. 
B) If developing countries strictly enforce labor and environmental laws,multinational corporations will move their factories to other countries. 
C) The International Monetary Fund has a special relationship with international investors. 
D) Poor countries cannot afford regular loans at the market rate,so below-market loans are offered as a form of aid. 
A) If poor countries do not offer tax breaks,multinational corporations will build their factories in other countries. 
B) If developing countries strictly enforce labor and environmental laws,multinational corporations will move their factories to other countries. 
C) The International Monetary Fund has a special relationship with international investors. 
D) Poor countries cannot afford regular loans at the market rate,so below-market loans are offered as a form of aid.

Question 15

Why did the debt crises of the 1980s lead to increased foreign direct investment in developing countries in the 1990s?

Accepted Answer

A) Banks in developed countries insisted on taking collateral to secure their loans. 
B) Developing countries removed restrictions on FDI once their access to foreign loans dried up. 
C) Developing countries refused to take out new loans themselves,leading MNCs in their countries to borrow to build new factories. 
D) Banks preferred to lend money to MNCs in rich countries rather than to governments in developing countries,and these MNCs then invested in developing countries directly. 
A) Banks in developed countries insisted on taking collateral to secure their loans. 
B) Developing countries removed restrictions on FDI once their access to foreign loans dried up. 
C) Developing countries refused to take out new loans themselves,leading MNCs in their countries to borrow to build new factories. 
D) Banks preferred to lend money to MNCs in rich countries rather than to governments in developing countries,and these MNCs then invested in developing countries directly.

Question 16

If international finance is beneficial,why is it also controversial?

Accepted Answer

Answers will vary.Students may discuss h

Question 17

What common interests do lenders and borrowers have?

Accepted Answer

A) Ensuring that investment dollars go only to socially useful projects 
B) Maintaining an equitable interest rate 
C) Reducing burdensome regulations 
D) Sustaining capital flows 
A) Ensuring that investment dollars go only to socially useful projects 
B) Maintaining an equitable interest rate 
C) Reducing burdensome regulations 
D) Sustaining capital flows

Question 18

Portfolio investments are those:

Accepted Answer

A) made by a group of investors who pool their money to buy overseas companies. 
B) made by the government of one country in assets in another country 
C) in which investors own and control assets in another country. 
D) in which investors have no role in managing the investment. 
A) made by a group of investors who pool their money to buy overseas companies. 
B) made by the government of one country in assets in another country 
C) in which investors own and control assets in another country. 
D) in which investors have no role in managing the investment.

Question 19

Which of the following is an example of the leverage a host country has with regard to multinational corporations?

Accepted Answer

A) Union Carbide moved its factory to Sri Lanka when India increased taxes. 
B) Toyota factories in the United States import parts from Japan. 
C) Ford built an automobile factory in Argentina but did not update its facilities. 
D) Chile nationalized international copper companies. 
A) Union Carbide moved its factory to Sri Lanka when India increased taxes. 
B) Toyota factories in the United States import parts from Japan. 
C) Ford built an automobile factory in Argentina but did not update its facilities. 
D) Chile nationalized international copper companies.

Question 20

What is a bilateral investment treaty (BIT)?

Accepted Answer

A) An agreement reached between a debtor country and the IMF on the conditions of the IMF's loans 
B) An agreement between two countries to protect investments from discrimination or expropriation 
C) An agreement between two countries on the taxation of multinational corporations 
D) An agreement whereby the United States bails out foreign banks for risky investments made in the U.S.economy 
A) An agreement reached between a debtor country and the IMF on the conditions of the IMF's loans 
B) An agreement between two countries to protect investments from discrimination or expropriation 
C) An agreement between two countries on the taxation of multinational corporations 
D) An agreement whereby the United States bails out foreign banks for risky investments made in the U.S.economy

Why was the 1997-98 Asian financial crisis a surprise?

Why is foreign direct investment sometimes controversial in developing countries?

What event sparked the 1980s debt crisis?

To which of the following countries did the Asian financial crisis of the 1990s spread?

Which of the following examples of migration would be best explained by the Heckscher-Ohlin theory?

Why is lending capital to foreign countries controversial in the lending countries?

The World Bank typically provides additional capital to:

How did trouble in the U.S.mortgage industry in 2008 lead to a sovereign debt crisis in Europe a few years later? What lessons can we draw from this about globalization and international finance?

Which of the following is a reason that international portfolio finance is considered beneficial for less developed countries?

Why have financial and debt crises been recurring features of the global economy?

What leverage over foreign direct investment,if any,does a developing country have over a multinational corporation?

Which organization was set up in the 1930s and is composed of the world's principal central banks?

The financial crises of the late 2000s and early 2010s primarily affected what type of country?

Why is there concessional finance?

Why did the debt crises of the 1980s lead to increased foreign direct investment in developing countries in the 1990s?

If international finance is beneficial,why is it also controversial?

What common interests do lenders and borrowers have?

Portfolio investments are those:

Which of the following is an example of the leverage a host country has with regard to multinational corporations?

What is a bilateral investment treaty (BIT)?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters

Exam 8: International Financial Relations

Why was the 1997-98 Asian financial crisis a surprise?

Why is foreign direct investment sometimes controversial in developing countries?

What event sparked the 1980s debt crisis?

To which of the following countries did the Asian financial crisis of the 1990s spread?

Which of the following examples of migration would be best explained by the Heckscher-Ohlin theory?

Why is lending capital to foreign countries controversial in the lending countries?

The World Bank typically provides additional capital to:

How did trouble in the U.S.mortgage industry in 2008 lead to a sovereign debt crisis in Europe a few years later? What lessons can we draw from this about globalization and international finance?

Which of the following is a reason that international portfolio finance is considered beneficial for less developed countries?

Why have financial and debt crises been recurring features of the global economy?

What leverage over foreign direct investment,if any,does a developing country have over a multinational corporation?

Which organization was set up in the 1930s and is composed of the world's principal central banks?

The financial crises of the late 2000s and early 2010s primarily affected what type of country?

Why is there concessional finance?

Why did the debt crises of the 1980s lead to increased foreign direct investment in developing countries in the 1990s?

If international finance is beneficial,why is it also controversial?

What common interests do lenders and borrowers have?

Portfolio investments are those:

Which of the following is an example of the leverage a host country has with regard to multinational corporations?

What is a bilateral investment treaty (BIT)?

What Shaped Our World

Understanding Interests, interactions, and Institutions

Why Are There Wars

Domestic Politics and War

International Institutions and War

Violence by Nonstate Actors: Civil War and Terrorism

International Trade

International Monetary Relations

Development: Causes of the Wealth and Poverty of Nations

International Law and Norms

Human Rights

The Global Environment

The Future of International Politics

Introduction

Foundations, War, and Peace

International Political Economy, Transnational Politics, and Looking Ahead

Filters