Question 1

What explains the sharply divergent long-run growth patterns?

Accepted Answer

The answer lies in the economi

Question 2

Over the period 1960-2000, the United States economy grew at roughly

Accepted Answer

A)  2.1 percent. 
B)  3 percent. 
C)  4 percent. 
D)  one percent. 
E)  3.5 percent. 
A)  2.1 percent. 
B)  3 percent. 
C)  4 percent. 
D)  one percent. 
E)  3.5 percent.

Question 3

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 4

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 5

In developing economies, national saving is often ________ relative to developed economies

Accepted Answer

A)  high 
B)  the same 
C)  hard to tell 
D)  low 
E)  low for the very poor countries and high for the more developed 
A)  high 
B)  the same 
C)  hard to tell 
D)  low 
E)  low for the very poor countries and high for the more developed

Question 6

In 1981-1983, the world economy suffered a steep recession. Naturally, the fall in industrial countries' aggregate demand had a direct negative impact on the developing countries. What other mechanism was an even more important contributor to this event?

Accepted Answer

A)  the immediate steep inflation that followed the recession. 
B)  the dollar's sharp depreciation in the foreign exchange market 
C)  the increase in primary commodity prices, increasing terms of trade in many poor countries 
D)  the collapse in primary commodity prices and the immediate, large rise in the interest burden that debtors had to pay 
E)  the influx of defaulting credit 
A)  the immediate steep inflation that followed the recession. 
B)  the dollar's sharp depreciation in the foreign exchange market 
C)  the increase in primary commodity prices, increasing terms of trade in many poor countries 
D)  the collapse in primary commodity prices and the immediate, large rise in the interest burden that debtors had to pay 
E)  the influx of defaulting credit

Question 7

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

Accepted Answer

The four main categories of the world ec

Question 8

What do you think about dollarization?

Accepted Answer

This is an open question. The answer is

Question 9

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

Question 10

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 11

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 12

The world's economies can be divided into four main categories according to their annual per-capita income levels: low-income, lower middle-income, upper middle-income and high-income economies. What category would the United States fall under?

Accepted Answer

A)  low-income 
B)  upper middle-income 
C)  high-income 
D)  lower middle-income 
E)  The U.S. falls between high-income and upper middle-income. 
A)  low-income 
B)  upper middle-income 
C)  high-income 
D)  lower middle-income 
E)  The U.S. falls between high-income and upper middle-income.

Question 13

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

Accepted Answer

See for example the vivid exam

Question 14

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

Accepted Answer

Real appreciation may result for any of

Question 15

What do you think about international "Chapter 11"?

Accepted Answer

A formal procedure whereby a country can

Question 16

Since foreign credit dries up in crises when it is most needed, developing countries can protect themselves from default by

Accepted Answer

A)  cutting off imports of goods. 
B)  allowing the exchange rate to float. 
C)  using equity finance only. 
D)  accumulating high levels of international reserves. 
E)  avoiding the international capital market. 
A)  cutting off imports of goods. 
B)  allowing the exchange rate to float. 
C)  using equity finance only. 
D)  accumulating high levels of international reserves. 
E)  avoiding the international capital market.

Question 17

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

Accepted Answer

Students should discuss the Asian crisis

Question 18

What is the theory of Second Best?

Accepted Answer

The principal of the second be

Question 19

Between 1960 and 1992, the annual growth rate in percent per year was the highest in

Accepted Answer

A)  Canada. 
B)  United States. 
C)  Brazil. 
D)  Singapore. 
E)  South Korea. 
A)  Canada. 
B)  United States. 
C)  Brazil. 
D)  Singapore. 
E)  South Korea.

Question 20

If a developing country institutes a currency board, it relinquishes control over having

Accepted Answer

A)  monetary policy autonomy. 
B)  exchange rate stability. 
C)  freedom of capital movement. 
D)  freedom of labor movement. 
E)  all of its funds. 
A)  monetary policy autonomy. 
B)  exchange rate stability. 
C)  freedom of capital movement. 
D)  freedom of labor movement. 
E)  all of its funds.

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

What explains the sharply divergent long-run growth patterns?

Over the period 1960-2000, the United States economy grew at roughly

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.

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.

In developing economies, national saving is often ________ relative to developed economies

In 1981-1983, the world economy suffered a steep recession. Naturally, the fall in industrial countries' aggregate demand had a direct negative impact on the developing countries. What other mechanism was an even more important contributor to this event?

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

What do you think about dollarization?

How would you define exchange control?

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

Most developing countries have tried to

The world's economies can be divided into four main categories according to their annual per-capita income levels: low-income, lower middle-income, upper middle-income and high-income economies. What category would the United States fall under?

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

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

What do you think about international "Chapter 11"?

Since foreign credit dries up in crises when it is most needed, developing countries can protect themselves from default by

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

What is the theory of Second Best?

Between 1960 and 1992, the annual growth rate in percent per year was the highest in

If a developing country institutes a currency board, it relinquishes control over having

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

Optimum Currency Areas and the European Experience

Financial Globalization: Opportunity and Crisis

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