Question 1

In general,one would expect that life expectancies reflect international differences in income levels.Do the data support such a claim?

Accepted Answer

A) Average life span falls as relative poverty falls. 
B) Average life span increases as relative poverty falls. 
C) There is no statistically significant relationship between the two. 
D) The relation is not very strong. 
E) The relationship looks more like a U-shape. 
A) Average life span falls as relative poverty falls. 
B) Average life span increases as relative poverty falls. 
C) There is no statistically significant relationship between the two. 
D) The relation is not very strong. 
E) The relationship looks more like a U-shape.

Question 2

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

Accepted Answer

By introducing a new currency and initia

Question 3

Explain why East Asian countries have done so well relative to South American countries.

Accepted Answer

Mainly,the reasons are: less m

Question 4

In general,the development of underground economic activity ________ economic efficiency

Accepted Answer

A) hinders 
B) has no effect 
C) aides 
D) hard to tell,sometime hinders,sometimes aides 
E) spikes 
A) hinders 
B) has no effect 
C) aides 
D) hard to tell,sometime hinders,sometimes aides 
E) spikes

Question 5

How would you describe the world distribution of income?

Accepted Answer

A) persistently unequal 
B) temporarily unequal 
C) converging 
D) fairly equal 
E) completely unpredictable 
A) persistently unequal 
B) temporarily unequal 
C) converging 
D) fairly equal 
E) completely unpredictable

Question 6

What do you think about dollarization?

Accepted Answer

This is an open question.The answer is p

Question 7

The relationship between annual real per-capita GDP and corruption across countries has been found to be

Accepted Answer

A) negative. 
B) positive. 
C) The relationship was negative in the late 1960s but is now positive. 
D) The relationship was in the late 1960s but is now negative. 
E) There is no relationship between these two variables. 
A) negative. 
B) positive. 
C) The relationship was negative in the late 1960s but is now positive. 
D) The relationship was in the late 1960s but is now negative. 
E) There is no relationship between these two variables.

Question 8

The Convertibility Law of April 1991 in Argentina

Accepted Answer

A) pegged the Argentinean currency to the US dollar at a ratio of one to one. 
B) pegged the Argentinean currency to the US dollar at a ratio of one to two. 
C) pegged the Argentinean currency to the US dollar at a ratio of one to 0.5. 
D) represents an era of floating exchange rate in Argentina. 
E) pegged the Argentinean currency to the British pound at a ratio of one to one. 
A) pegged the Argentinean currency to the US dollar at a ratio of one to one. 
B) pegged the Argentinean currency to the US dollar at a ratio of one to two. 
C) pegged the Argentinean currency to the US dollar at a ratio of one to 0.5. 
D) represents an era of floating exchange rate in Argentina. 
E) pegged the Argentinean currency to the British pound at a ratio of one to one.

Question 9

Which of the following are characteristic of a developing country?

Accepted Answer

A) extensive embrace of free trade policies 
B) low inflation 
C) high national savings 
D) a current account deficit and low national savings 
E) strong credit institutions 
A) extensive embrace of free trade policies 
B) low inflation 
C) high national savings 
D) a current account deficit and low national savings 
E) strong credit institutions

Question 10

Please consider Table 22-2 below.     Assuming constant Annual Average Growth Rate in the future,determine the year in which the United States will have the same output per capita as South Korea?

Accepted Answer

(34,365)(1 + 0.025)^t^-2000 = (15,702)

Question 11

Does it appear that currency boards make low-inflation policies credible?

Accepted Answer

Currency boards have the power to bring

Question 12

Since 1960,South Korea and Singapore enjoyed an average per-capita growth rates ________ the average industrialized world.

Accepted Answer

A) far below 
B) far above 
C) about the same 
D) slightly below 
E) slightly above 
A) far below 
B) far above 
C) about the same 
D) slightly below 
E) slightly above

Question 13

In 1991,Argentina established a radical institutional reform after experiencing a decade marked by financial instability.This program was called the new Convertibility Law.What did this law do?

Accepted Answer

A) made Argentina's currency fully convertible into Eurocurrency at a fixed rate 
B) required that the monetary base be backed completely by U.S.dollars 
C) placed limits on exports of commodities 
D) made Argentina's currency fully convertible into U.S.dollars at a fixed rate and required that the monetary base be backed completely by gold or foreign currency 
E) restricted risky international trade activity 
A) made Argentina's currency fully convertible into Eurocurrency at a fixed rate 
B) required that the monetary base be backed completely by U.S.dollars 
C) placed limits on exports of commodities 
D) made Argentina's currency fully convertible into U.S.dollars at a fixed rate and required that the monetary base be backed completely by gold or foreign currency 
E) restricted risky international trade activity

Question 14

There are many ways developing countries finance their external deficits EXCEPT

Accepted Answer

A) bank finance. 
B) portfolio investment in ownership of firms. 
C) bond finance. 
D) official lending. 
E) foreign exchange rates. 
A) bank finance. 
B) portfolio investment in ownership of firms. 
C) bond finance. 
D) official lending. 
E) foreign exchange rates.

Question 15

The main factors that discourage investment in capital and skills in developing countries are

Accepted Answer

A) political instability,insecure property rights. 
B) political instability,insecure property rights,misguided economic policies. 
C) political instability,misguided economic policies. 
D) political instability. 
E) insecure property rights,misguided economic policies. 
A) political instability,insecure property rights. 
B) political instability,insecure property rights,misguided economic policies. 
C) political instability,misguided economic policies. 
D) political instability. 
E) insecure property rights,misguided economic policies.

Question 16

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Accepted Answer

When a country's liabilities are in the

Question 17

Write an essay on the importance of a sound banking system in developing countries.

Accepted Answer

See for example the vivid exam

Question 18

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

Accepted Answer

A) Argentina 
B) Brazil 
C) Chile 
D) Colombia 
E) Mexico 
A) Argentina 
B) Brazil 
C) Chile 
D) Colombia 
E) Mexico

Question 19

"Developing countries should delay opening the capital account until the domestic financial system is strong enough to withstand the sometimes violent ebb and flow of world capital." Discuss.

Accepted Answer

Probably true.The issue is rel

Question 20

Explain the theory behind convergence and why it is a "deceptively simple" theory.

Accepted Answer

Convergence is the tendency for gaps bet

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

In general,one would expect that life expectancies reflect international differences in income levels.Do the data support such a claim?

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

Explain why East Asian countries have done so well relative to South American countries.

In general,the development of underground economic activity ________ economic efficiency

How would you describe the world distribution of income?

What do you think about dollarization?

The relationship between annual real per-capita GDP and corruption across countries has been found to be

The Convertibility Law of April 1991 in Argentina

Which of the following are characteristic of a developing country?

Please consider Table 22-2 below. Assuming constant Annual Average Growth Rate in the future,determine the year in which the United States will have the same output per capita as South Korea?

Does it appear that currency boards make low-inflation policies credible?

Since 1960,South Korea and Singapore enjoyed an average per-capita growth rates ________ the average industrialized world.

In 1991,Argentina established a radical institutional reform after experiencing a decade marked by financial instability.This program was called the new Convertibility Law.What did this law do?

There are many ways developing countries finance their external deficits EXCEPT

The main factors that discourage investment in capital and skills in developing countries are

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Write an essay on the importance of a sound banking system in developing countries.

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

"Developing countries should delay opening the capital account until the domestic financial system is strong enough to withstand the sometimes violent ebb and flow of world capital." Discuss.

Explain the theory behind convergence and why it is a "deceptively simple" theory.

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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