Question 1

Brazil's 1999 crisis was relatively short lived because

Accepted Answer

A) Brazil's financial institutions had avoided borrowing all together. 
B) Brazil's financial institutions had avoided heavy borrowing in local currency. 
C) Brazil's financial institutions had avoided heavy borrowing in dollars. 
D) Brazil's financial institutions had extended low-interest loans. 
E) Brazil's financial institutions had extended high-interest loans. 
A) Brazil's financial institutions had avoided borrowing all together. 
B) Brazil's financial institutions had avoided heavy borrowing in local currency. 
C) Brazil's financial institutions had avoided heavy borrowing in dollars. 
D) Brazil's financial institutions had extended low-interest loans. 
E) Brazil's financial institutions had extended high-interest loans.

Question 2

Most developing countries have tried to

Accepted Answer

A) liberalize capital movement. 
B) control capital movements. 
C) Hard to tell from the data. 
D) in the 1960s and 1970s control,now to liberalize. 
E) in the 1960s and 1970s liberalize,now to control. 
A) liberalize capital movement. 
B) control capital movements. 
C) Hard to tell from the data. 
D) in the 1960s and 1970s control,now to liberalize. 
E) in the 1960s and 1970s liberalize,now to control.

Question 3

Compare currency board to conventional fixed exchange rate.

Accepted Answer

Currency board may not acquire domestic

Question 4

The real resource a government earns when it prints money and spends it on goods and services is called

Accepted Answer

A) seigniorage. 
B) control of capital movements by limiting foreign exchange transactions. 
C) pure profits. 
D) inflation profits. 
E) greenback. 
A) seigniorage. 
B) control of capital movements by limiting foreign exchange transactions. 
C) pure profits. 
D) inflation profits. 
E) greenback.

Question 5

How would you define a currency board?

Accepted Answer

A) the process by which non-pegged interest rates are allowed to fluctuate 
B) the stockpiling of international reserves by developing countries 
C) using the dollar to carry out all domestic transactions,making the domestic currency a currency in name alone 
D) a constraint placed on monetary policy 
E) The monetary bases is backed entirely by foreign currency and the central bank holds no domestic assets. 
A) the process by which non-pegged interest rates are allowed to fluctuate 
B) the stockpiling of international reserves by developing countries 
C) using the dollar to carry out all domestic transactions,making the domestic currency a currency in name alone 
D) a constraint placed on monetary policy 
E) The monetary bases is backed entirely by foreign currency and the central bank holds no domestic assets.

Question 6

Which of the following countries had a larger growth rate since 1960?

Accepted Answer

A) U.S. 
B) Senegal 
C) South Korea 
D) Kamul 
E) Colombia 
A) U.S. 
B) Senegal 
C) South Korea 
D) Kamul 
E) Colombia

Question 7

How would you define convergence?

Accepted Answer

A) tendency for gaps between industrial countries' per-capital incomes to narrow 
B) tendency for gaps between all countries' per-capital incomes to narrow 
C) the theory that a crisis in a low-income country will spread to all countries,regardless of debt structure 
D) the theory that a crisis in a low-income country will spread to only those countries which had lent money to the original country 
E) tendency for the world distribution of income to be persistently unequal 
A) tendency for gaps between industrial countries' per-capital incomes to narrow 
B) tendency for gaps between all countries' per-capital incomes to narrow 
C) the theory that a crisis in a low-income country will spread to all countries,regardless of debt structure 
D) the theory that a crisis in a low-income country will spread to only those countries which had lent money to the original country 
E) tendency for the world distribution of income to be persistently unequal

Question 8

What are the main lessons economists learned from the developing country crisis?

Accepted Answer

(1)Choosing the right exchange

Question 9

With which country did the Debt Crisis of the early 1980s begin?

Accepted Answer

A) France 
B) Mexico 
C) Argentina 
D) Japan 
E) Germany 
A) France 
B) Mexico 
C) Argentina 
D) Japan 
E) Germany

Question 10

During the time period of 1981-1983 what dramatic world issue happened?

Accepted Answer

A) political instability,insecure property rights 
B) stock market crashed 
C) world wide hyperinflation 
D) the collapse of the U.S.mortgages market 
E) A world economic recession caused developing countries to not be able to make payments on foreign loans,in turn causing a universal default. 
A) political instability,insecure property rights 
B) stock market crashed 
C) world wide hyperinflation 
D) the collapse of the U.S.mortgages market 
E) A world economic recession caused developing countries to not be able to make payments on foreign loans,in turn causing a universal default.

Question 11

During 1991,Argentina's monetary law had a currency board.Explain and give an example.

Accepted Answer

The currency board is monetary base back

Question 12

What does it mean for a loan to be in default?

Accepted Answer

A) when the borrower of the a loan fails to repay on schedule according to a loan contract,without the agreement of the lender 
B) when the borrower of a loan fails to repay on schedule according to a loan contract,with the agreement of the lender 
C) when the lender of a loan fails to supplies the full amount of a loan to the borrower 
D) when the lender of a loan supplies the full amount of a loan to a borrower without any promise of being repaid 
E) when the lender of a loan fails to offer the promised sum 
A) when the borrower of the a loan fails to repay on schedule according to a loan contract,without the agreement of the lender 
B) when the borrower of a loan fails to repay on schedule according to a loan contract,with the agreement of the lender 
C) when the lender of a loan fails to supplies the full amount of a loan to the borrower 
D) when the lender of a loan supplies the full amount of a loan to a borrower without any promise of being repaid 
E) when the lender of a loan fails to offer the promised sum

Question 13

Over the post-war era,poorer countries grew

Accepted Answer

A) faster. 
B) slower. 
C) stayed the same. 
D) grew faster,then grew slower. 
E) No general tendency can be found. 
A) faster. 
B) slower. 
C) stayed the same. 
D) grew faster,then grew slower. 
E) No general tendency can be found.

Question 14

Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors.Evaluate the Chilean policies during that decade.

Accepted Answer

Students should refer to the d

Question 15

How was South Korea able to become one of the East Asian Economic Miracles?

Accepted Answer

South Korea was able to become one of th

Question 16

Which of the following is a reason that developing countries are running large surpluses?

Accepted Answer

A) They are required to do so by IMF. 
B) They have defaulted on international loans. 
C) They have pegged exchange rates and thus the growth of exports must drive surplus up. 
D) They have a strong desire to accumulate international reserves to protect against a sudden stop of capital inflows. 
E) They don't know how to manage their surpluses. 
A) They are required to do so by IMF. 
B) They have defaulted on international loans. 
C) They have pegged exchange rates and thus the growth of exports must drive surplus up. 
D) They have a strong desire to accumulate international reserves to protect against a sudden stop of capital inflows. 
E) They don't know how to manage their surpluses.

Question 17

The main reason for the crisis in Argentina in 2001 and 2002,as to do with exchange rate policy,i.e. ,the continued peg of the exchange rate to the dollar.Discuss.

Accepted Answer

Student should emphasize that the quote

Question 18

While many developing countries have reformed their economies in order to imitate the success of the successful industrial economies,the process remains incomplete and most developing countries tend to be characterized by all of the following EXCEPT

Accepted Answer

A) seigniorage. 
B) control of capital movements by limiting foreign exchange transactions connected with trade in assets. 
C) use of natural resources or agricultural commodities as an important share of exports. 
D) a worse job of directing savings toward their most efficient investment uses. 
E) reduced corruption and poverty due to limited underground markets. 
A) seigniorage. 
B) control of capital movements by limiting foreign exchange transactions connected with trade in assets. 
C) use of natural resources or agricultural commodities as an important share of exports. 
D) a worse job of directing savings toward their most efficient investment uses. 
E) reduced corruption and poverty due to limited underground markets.

Question 19

When one compares per-capital output growth rates among countries

Accepted Answer

A) one needs to correct the data to account for departures from purchasing power parity. 
B) such corrections are often not necessary. 
C) such corrections are sometimes necessary. 
D) the evidence whether such corrections are necessary are vague. 
E) such corrections are not necessary. 
A) one needs to correct the data to account for departures from purchasing power parity. 
B) such corrections are often not necessary. 
C) such corrections are sometimes necessary. 
D) the evidence whether such corrections are necessary are vague. 
E) such corrections are not necessary.

Question 20

How would you define exchange control?

Accepted Answer

A) The government allocates foreign exchange through decree rather than through the market. 
B) a country NOT pegging its exchange rate 
C) a country pegging its exchange rate 
D) a country buying up excess current account so that CA=0 
E) a country restricting all foreign exchange 
A) The government allocates foreign exchange through decree rather than through the market. 
B) a country NOT pegging its exchange rate 
C) a country pegging its exchange rate 
D) a country buying up excess current account so that CA=0 
E) a country restricting all foreign exchange

Exam 22: Developing Countries: Growth, Crisis, and Reform

Brazil's 1999 crisis was relatively short lived because

Most developing countries have tried to

Compare currency board to conventional fixed exchange rate.

The real resource a government earns when it prints money and spends it on goods and services is called

How would you define a currency board?

Which of the following countries had a larger growth rate since 1960?

How would you define convergence?

What are the main lessons economists learned from the developing country crisis?

With which country did the Debt Crisis of the early 1980s begin?

During the time period of 1981-1983 what dramatic world issue happened?

During 1991,Argentina's monetary law had a currency board.Explain and give an example.

What does it mean for a loan to be in default?

Over the post-war era,poorer countries grew

Some economists claim that the Chilean experience during the 1990s was much more successful than its Latin American neighbors.Evaluate the Chilean policies during that decade.

How was South Korea able to become one of the East Asian Economic Miracles?

Which of the following is a reason that developing countries are running large surpluses?

The main reason for the crisis in Argentina in 2001 and 2002,as to do with exchange rate policy,i.e. ,the continued peg of the exchange rate to the dollar.Discuss.

While many developing countries have reformed their economies in order to imitate the success of the successful industrial economies,the process remains incomplete and most developing countries tend to be characterized by all of the following EXCEPT

When one compares per-capital output growth rates among countries

How would you define exchange control?

Introduction

World Trade: An Overview

Labor Productivity and Comparative Advantage: The Ricardian Model

Specific Factors and Income Distribution

Resources and Trade: the Heckscher-Ohlin Model

The Standard Trade Model

External Economies of Scale and the International Location of Production

Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises

The Instruments of Trade Policy

The Political Economy of Trade Policy

Trade Policy in Developing Countries

Controversies in Trade Policy

National Income Accounting and the Balance of Payments

Exchange Rates and the Foreign Exchange Market: An Asset Approach

Money,Interest Rates, and Exchange Rates

Price Levels and the Exchange Rate in the Long Run

Output and the Exchange Rate in the Short Run

Fixed Exchange Rates and Foreign Exchange Intervention

International Monetary Systems: An Historical Overview

Financial Globalization: Opportunity and Crisis

Optimum Currency Areas and the Euro

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