Question 1

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

Accepted Answer

A)  make loans to the riskiest nations so that private investors will not be tempted to take a risk. 
B)  loan only to countries that have free elections. 
C)  not make loans to risky nations because there is a high demand for funds from safer nations. 
D)  impose tougher preconditions on borrowers. 
A)  make loans to the riskiest nations so that private investors will not be tempted to take a risk. 
B)  loan only to countries that have free elections. 
C)  not make loans to risky nations because there is a high demand for funds from safer nations. 
D)  impose tougher preconditions on borrowers.

Question 2

Which of the following has contributed to developing countries' poor economic performance?

Accepted Answer

A)  low population growth 
B)  corruption 
C)  a high saving rate 
D)  foreign direct investment 
A)  low population growth 
B)  corruption 
C)  a high saving rate 
D)  foreign direct investment

Question 3

Foreign direct investment refers to

Accepted Answer

A)  the acquisition of more than 10 percent of the shares of ownership in a company in another nation. 
B)  the acquisition of less than 10 percent of the shares of ownership in a company in another nation. 
C)  the granting of a loan to a company located in a foreign country. 
D)  a direct monetary grant to a foreign company or government. 
A)  the acquisition of more than 10 percent of the shares of ownership in a company in another nation. 
B)  the acquisition of less than 10 percent of the shares of ownership in a company in another nation. 
C)  the granting of a loan to a company located in a foreign country. 
D)  a direct monetary grant to a foreign company or government.

Question 4

Over the past decade, a nation's real Gross Domestic Product (GDP) grew at a constant rate of 10 percent per year while its population grew 8 percent annually. Forecasters predict that during the coming decade, real GDP will continue to grow 10 percent annually, but the population growth rate is expected to drop to 7 percent annually. If the forecasters are correct, which of the following will be TRUE?

Accepted Answer

A)  The annual rate of growth of per capita real GDP will decline from 3 percent to 2 percent. 
B)  The annual rate of growth of per capita real GDP will decline from 2 percent to 1 percent. 
C)  The annual rate of growth of per capita real GDP will increase from 2 percent to 3 percent. 
D)  The annual rate of growth of per capita real GDP will increase from 2 percent to 7 percent. 
A)  The annual rate of growth of per capita real GDP will decline from 3 percent to 2 percent. 
B)  The annual rate of growth of per capita real GDP will decline from 2 percent to 1 percent. 
C)  The annual rate of growth of per capita real GDP will increase from 2 percent to 3 percent. 
D)  The annual rate of growth of per capita real GDP will increase from 2 percent to 7 percent.

Question 5

Foreign direct investment is

Accepted Answer

A)  the purchase of less than 10 percent of the shares of ownership in a company in another country. 
B)  the purchase of more than 10 percent of the shares of ownership in a company in another country. 
C)  the diversification of purchasing shares in many companies in one country so that risk is kept to a minimum. 
D)  the diversification of purchasing shares in one company in many countries so that risk is kept to a minimum. 
A)  the purchase of less than 10 percent of the shares of ownership in a company in another country. 
B)  the purchase of more than 10 percent of the shares of ownership in a company in another country. 
C)  the diversification of purchasing shares in many companies in one country so that risk is kept to a minimum. 
D)  the diversification of purchasing shares in one company in many countries so that risk is kept to a minimum.

Question 6

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

Accepted Answer

A)  portfolio investment. 
B)  gross private international investment. 
C)  foreign direct investment. 
D)  indirect investment. 
A)  portfolio investment. 
B)  gross private international investment. 
C)  foreign direct investment. 
D)  indirect investment.

Question 7

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 8

The rate of growth in real GDP minus the rate of growth of the population is the

Accepted Answer

A)  rate of growth of nominal GDP. 
B)  unemployment rate. 
C)  employment growth rate. 
D)  rate of growth of per capita real GDP. 
A)  rate of growth of nominal GDP. 
B)  unemployment rate. 
C)  employment growth rate. 
D)  rate of growth of per capita real GDP.

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

Which of the following has contributed to developing countries' poor economic performance?

Foreign direct investment refers to

Foreign direct investment is

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

The primary motivation for private foreign investment in developing nations is

The rate of growth in real GDP minus the rate of growth of the population is the

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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Exam 18: Policies and Prospects for Global Economic Growth

Because of the problems of adverse selection and moral hazard, it has been suggested that the World Bank and International Monetary Fund

Which of the following has contributed to developing countries' poor economic performance?

Foreign direct investment refers to

Foreign direct investment is

The acquisition of more than 10 percent of the shares of ownership in a company in another nation is called

The primary motivation for private foreign investment in developing nations is

The rate of growth in real GDP minus the rate of growth of the population is the

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

Filters