Question 1

Which of the following economic lessons should we take from developing country crises in Latin America (and elsewhere)?

Accepted Answer

A) Only that it is important to choose the right exchange rate regime. 
B) Only that banking is of central importance in any government. 
C) The order in which reform measures are implemented are irrelevant. 
D) It is important to choose the right exchange rate regime and banking is of central importance in any government. 
E) The order in which reform measures are implemented are irrelevant and banking is of central importance in any government. 
A) Only that it is important to choose the right exchange rate regime. 
B) Only that banking is of central importance in any government. 
C) The order in which reform measures are implemented are irrelevant. 
D) It is important to choose the right exchange rate regime and banking is of central importance in any government. 
E) The order in which reform measures are implemented are irrelevant and banking is of central importance in any government.

Question 2

List and explain 3 major channels through which developing countries have financed their external deficits.

Accepted Answer

Any of the 3 below along with

Question 3

Explain why a exchange rate-based stabilization plan may result in a real appreciation?

Accepted Answer

Real appreciation may result for any of

Question 4

Explain the extensive economic role of government within a developing country.

Accepted Answer

An open question.Students should include

Question 5

Should the IMF be abolished? Discuss.

Accepted Answer

An open answer.Arguments for abolishing

Question 6

Over the post-war era,the gaps between industrial countries' living standards

Accepted Answer

A) disappeared. 
B) stayed the same. 
C) increased. 
D) decreased. 
E) fluctuated. 
A) disappeared. 
B) stayed the same. 
C) increased. 
D) decreased. 
E) fluctuated.

Question 7

Which theory best explains the wealth inequalities amongst nations?

Accepted Answer

A) weather 
B) government institutions 
C) natural selection 
D) factors outside of any human control 
E) levels of corruption 
A) weather 
B) government institutions 
C) natural selection 
D) factors outside of any human control 
E) levels of corruption

Question 8

What do you think about international "Chapter 11"?

Accepted Answer

A formal procedure whereby a country can

Question 9

Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times?

Accepted Answer

The capital inflows that finance develop

Question 10

Over the post-war era,the gaps between countries' living standards

Accepted Answer

A) disappeared. 
B) stayed the same. 
C) increased. 
D) decreased. 
E) changed inconsistently. 
A) disappeared. 
B) stayed the same. 
C) increased. 
D) decreased. 
E) changed inconsistently.

Question 11

Average per-capita GDP in the richest,most prosperous economies is ________ times that of the average in the ________ economies.

Accepted Answer

A) 95,low (poorest)income 
B) 95,lower-middle income 
C) 73,lower-middle income 
D) 44,low (poorest)income 
E) 69,low (poorest)income 
A) 95,low (poorest)income 
B) 95,lower-middle income 
C) 73,lower-middle income 
D) 44,low (poorest)income 
E) 69,low (poorest)income

Question 12

Explain the reasons for the economic "miracle" of the East Asian countries between 1960 and 1997.Is it only because of the common Asian practice of industrial policy and business-government cooperation?

Accepted Answer

Students should emphasize high

Question 13

"Sharp contractions in a country's output and employment invariably result from a crisis in which the country suddenly loses access to all foreign sources of funds." Explain how the current account identity necessitates these contractions.

Accepted Answer

S - I = CA (Current Account Identity)
Im

Question 14

Describe the Asian financial crisis as it unfolds beginning with the devaluation of the Thai currency in July 1997,followed by the Malaysian,Indonesian and South Korean crises.As part of your answer,elaborate on the Malaysian response to the crisis versus its troubled neighbors responses.

Accepted Answer

Students should emphasize the relation t

Question 15

Explain what the four main categories of world economies are and give examples?

Accepted Answer

The four main categories of the world ec

Question 16

Why may equity finance be preferred to debt finance for developing countries?

Accepted Answer

A) A fall in domestic income automatically reduces the earnings of foreign shareholders without violating any loan agreement. 
B) There are laws insuring against any default with equity finance. 
C) The risk is shared between debtor and creditor with debt finance. 
D) The tax structure leaves equity finance unconstrained. 
E) Repayments are unaffected by falls in real income. 
A) A fall in domestic income automatically reduces the earnings of foreign shareholders without violating any loan agreement. 
B) There are laws insuring against any default with equity finance. 
C) The risk is shared between debtor and creditor with debt finance. 
D) The tax structure leaves equity finance unconstrained. 
E) Repayments are unaffected by falls in real income.

Question 17

Which of the following does NOT explain why developing countries encouraged new manufacturing industries of their own in the mid 20th century?

Accepted Answer

A) They were cut off from traditional suppliers of manufactures during WWII. 
B) Former colonial areas had something to prove;they wanted to attain the same income levels as their former rulers. 
C) Leaders of these countries feared that their efforts to escape poverty would be doomed if they continues to specialize in primary commodity exports. 
D) There was political pressure to protect these industries. 
E) Developing countries ran out of the natural resources that traditionally made up the majority of their trade. 
A) They were cut off from traditional suppliers of manufactures during WWII. 
B) Former colonial areas had something to prove;they wanted to attain the same income levels as their former rulers. 
C) Leaders of these countries feared that their efforts to escape poverty would be doomed if they continues to specialize in primary commodity exports. 
D) There was political pressure to protect these industries. 
E) Developing countries ran out of the natural resources that traditionally made up the majority of their trade.

Question 18

Discuss the role of more "transparency" in reducing the risk of financial crisis.

Accepted Answer

Students should discuss the Asian crisis

Question 19

Please consider Table 22-2 below.     At that Annual Average Growth Rate,how many years does it take for the output per capita to double in both the United States and South Korea.

Accepted Answer

United States (1 + 0.025)^t = 2 t = ln(2)/

Question 20

Which of the following is NOT a common characteristic of a developing country?

Accepted Answer

A) extensive direct government control of the economy 
B) history of low inflation 
C) many weak credit institutions 
D) "pegged" exchange rates 
E) Agricultural commodities make up a large share of its exports. 
A) extensive direct government control of the economy 
B) history of low inflation 
C) many weak credit institutions 
D) "pegged" exchange rates 
E) Agricultural commodities make up a large share of its exports.

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

Which of the following economic lessons should we take from developing country crises in Latin America (and elsewhere)?

List and explain 3 major channels through which developing countries have financed their external deficits.

Explain why a exchange rate-based stabilization plan may result in a real appreciation?

Explain the extensive economic role of government within a developing country.

Should the IMF be abolished? Discuss.

Over the post-war era,the gaps between industrial countries' living standards

Which theory best explains the wealth inequalities amongst nations?

What do you think about international "Chapter 11"?

Describe alternative forms of capital inflow to finance external deficits and explain why these methods were used in different times?

Over the post-war era,the gaps between countries' living standards

Average per-capita GDP in the richest,most prosperous economies is ________ times that of the average in the ________ economies.

Explain the reasons for the economic "miracle" of the East Asian countries between 1960 and 1997.Is it only because of the common Asian practice of industrial policy and business-government cooperation?

"Sharp contractions in a country's output and employment invariably result from a crisis in which the country suddenly loses access to all foreign sources of funds." Explain how the current account identity necessitates these contractions.

Describe the Asian financial crisis as it unfolds beginning with the devaluation of the Thai currency in July 1997,followed by the Malaysian,Indonesian and South Korean crises.As part of your answer,elaborate on the Malaysian response to the crisis versus its troubled neighbors responses.

Explain what the four main categories of world economies are and give examples?

Why may equity finance be preferred to debt finance for developing countries?

Which of the following does NOT explain why developing countries encouraged new manufacturing industries of their own in the mid 20th century?

Discuss the role of more "transparency" in reducing the risk of financial crisis.

Please consider Table 22-2 below. At that Annual Average Growth Rate,how many years does it take for the output per capita to double in both the United States and South Korea.

Which of the following is NOT a common characteristic of a developing country?

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

Filters

Average per-capita GDP in the richest,most prosperous economies is times that of the average in the economies.