Question 1

The primary motivation for private foreign investment in developing nations is

Accepted Answer

A)  to improve the standard of living for workers. 
B)  to do research in countries with fewer social regulations. 
C)  to eradicate poverty. 
D)  the potential for high rates of return. 
A)  to improve the standard of living for workers. 
B)  to do research in countries with fewer social regulations. 
C)  to eradicate poverty. 
D)  the potential for high rates of return.

Question 2

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 3

One of the major criticisms of the World Bank is that it lends funds

Accepted Answer

A)  to impoverished nations. 
B)  to countries which could easily borrow funds from other sources. 
C)  to industrialized nations. 
D)  to terrorist groups not affiliated with any country. 
A)  to impoverished nations. 
B)  to countries which could easily borrow funds from other sources. 
C)  to industrialized nations. 
D)  to terrorist groups not affiliated with any country.

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

When there is a building that is used for production, but no one has clear property rights to it,

Accepted Answer

A)  resources are guided to their best use by "the invisible hand." 
B)  this is known as "dead capital" and causes efficient production. 
C)  this is known as "dead capital" and causes no production. 
D)  this is known as "dead capital" and causes inefficient production. 
A)  resources are guided to their best use by "the invisible hand." 
B)  this is known as "dead capital" and causes efficient production. 
C)  this is known as "dead capital" and causes no production. 
D)  this is known as "dead capital" and causes inefficient production.

Question 6

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.

Question 7

All of the following are sources of funding for capital goods in developing countries EXCEPT

Accepted Answer

A)  loans from banks. 
B)  foreign direct investment. 
C)  taxation. 
D)  portfolio investment. 
A)  loans from banks. 
B)  foreign direct investment. 
C)  taxation. 
D)  portfolio investment.

Question 8

A higher population growth rate can potentially lead to a higher rate of growth in per capita real GDP if

Accepted Answer

A)  it leads to an increase in the amount of dead capital. 
B)  it leads to greater democracy in a nation. 
C)  young workers replace older workers. 
D)  there is a greater labor force participation rate. 
A)  it leads to an increase in the amount of dead capital. 
B)  it leads to greater democracy in a nation. 
C)  young workers replace older workers. 
D)  there is a greater labor force participation rate.

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

What are some of the criticisms that have been levied on the World Bank and the International Monetary Fund concerning adverse selection and moral hazard?

Accepted Answer

The World Bank and International Monetar

Question 11

The World Bank will primarily make

Accepted Answer

A)  short-term loans for investment projects that are relatively safe. 
B)  short-term loans for investment projects which might not receive private financial support. 
C)  long-term loans for investment projects that are relatively risky. 
D)  long-term in nature for investment projects which might not receive private financial support. 
A)  short-term loans for investment projects that are relatively safe. 
B)  short-term loans for investment projects which might not receive private financial support. 
C)  long-term loans for investment projects that are relatively risky. 
D)  long-term in nature for investment projects which might not receive private financial support.

Question 12

Which organization functions as a lender of last resort for national governments?

Accepted Answer

A)  The World Bank 
B)  The U.S. Treasury 
C)  The Federal Reserve Bank 
D)  The International Monetary Fund 
A)  The World Bank 
B)  The U.S. Treasury 
C)  The Federal Reserve Bank 
D)  The International Monetary Fund

Question 13

Discuss the rationales for foreign financing of investment in developing actions and explain how developing countries benefit from international capital investment.

Accepted Answer

The primary motivation for foreign inves

Question 14

Population growth is more likely to contribute to economic growth when

Accepted Answer

A)  economic freedom is present. 
B)  capital accumulation is limited. 
C)  technological progress is limited. 
D)  the labor force participation rate does not increase. 
A)  economic freedom is present. 
B)  capital accumulation is limited. 
C)  technological progress is limited. 
D)  the labor force participation rate does not increase.

Question 15

What will happen to the annual rate of growth of per capita real GDP if the annual rate of population growth increases and the annual rate of growth of real GDP goes down?

Accepted Answer

A)  It will increase since an increase in population means an increase in labor that translates into an increase in real GDP. 
B)  It will increase since the annual rate of growth of real GDP does not influence the growth rate of per capita real GDP. 
C)  It will decrease since an increase in the growth rate of population and a decrease in the growth rate of real GDP both work to decrease the growth of per capita real GDP. 
D)  The effect will depend upon whether the rate of population growth is greater than or less than the rate of growth of real GDP. 
A)  It will increase since an increase in population means an increase in labor that translates into an increase in real GDP. 
B)  It will increase since the annual rate of growth of real GDP does not influence the growth rate of per capita real GDP. 
C)  It will decrease since an increase in the growth rate of population and a decrease in the growth rate of real GDP both work to decrease the growth of per capita real GDP. 
D)  The effect will depend upon whether the rate of population growth is greater than or less than the rate of growth of real GDP.

Question 16

In the determination of economic growth, political freedom

Accepted Answer

A)  is more important than economic freedom. 
B)  appears to be less important than economic freedom. 
C)  contributes little to job growth. 
D)  is equally as important as economic freedom. 
A)  is more important than economic freedom. 
B)  appears to be less important than economic freedom. 
C)  contributes little to job growth. 
D)  is equally as important as economic freedom.

Exam 18: Policies and Prospects for Global Economic Growth

The primary motivation for private foreign investment in developing nations is

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

One of the major criticisms of the World Bank is that it lends funds

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

When there is a building that is used for production, but no one has clear property rights to it,

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

All of the following are sources of funding for capital goods in developing countries EXCEPT

A higher population growth rate can potentially lead to a higher rate of growth in per capita real GDP if

Which of the following represents dead capital?

What are some of the criticisms that have been levied on the World Bank and the International Monetary Fund concerning adverse selection and moral hazard?

The World Bank will primarily make

Which organization functions as a lender of last resort for national governments?

Discuss the rationales for foreign financing of investment in developing actions and explain how developing countries benefit from international capital investment.

Population growth is more likely to contribute to economic growth when

What will happen to the annual rate of growth of per capita real GDP if the annual rate of population growth increases and the annual rate of growth of real GDP goes down?

In the determination of economic growth, political freedom

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

Measuring the Economys Performance

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

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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