Question 1

Dead capital refers to

Accepted Answer

A)  a capital resource that lacks clear title ownership. 
B)  a capital resource whose owner is deceased. 
C)  a capital resource jointly owned by more than one person. 
D)  a capital resource that has no more useful life. 
A)  a capital resource that lacks clear title ownership. 
B)  a capital resource whose owner is deceased. 
C)  a capital resource jointly owned by more than one person. 
D)  a capital resource that has no more useful life.

Question 2

How have government inefficiencies contributed to the creation of dead capital in the world's developing nations?

Accepted Answer

Governments in developing nations place

Question 3

Which of the following are NOT part of the World Bank?

Accepted Answer

A)  International Development Association 
B)  Federal Reserve Bank of New York 
C)  International Center for Settlement of Investment Disputes 
D)  Multinational Investment Guarantee Agency 
A)  International Development Association 
B)  Federal Reserve Bank of New York 
C)  International Center for Settlement of Investment Disputes 
D)  Multinational Investment Guarantee Agency

Question 4

Explain the meaning of the term dead capital, and discuss why its existence retards economic growth.

Accepted Answer

Dead capital means a capital resource wi

Question 5

When government inefficiencies exist

Accepted Answer

A)  a country tends to grow at a slower rate. 
B)  a country tends to grow at a faster rate. 
C)  economic growth is not affected. 
D)  economic growth is higher if the relative size of government in the economy is larger. 
A)  a country tends to grow at a slower rate. 
B)  a country tends to grow at a faster rate. 
C)  economic growth is not affected. 
D)  economic growth is higher if the relative size of government in the economy is larger.

Question 6

What are the sources of private investments in foreign nations?

Accepted Answer

The three sources of private investment

Question 7

Two types of asymmetric information that create problems for international investment are

Accepted Answer

A)  adverse hazard and moral selection. 
B)  adverse hazard and moral hazard. 
C)  adverse selection and moral hazard. 
D)  adverse selection and moral selection. 
A)  adverse hazard and moral selection. 
B)  adverse hazard and moral hazard. 
C)  adverse selection and moral hazard. 
D)  adverse selection and moral selection.

Question 8

Moral hazard is a barrier to financing global growth because

Accepted Answer

A)  firms sometimes have trouble determining whether they need funds or not. 
B)  if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms. 
C)  there is the possibility that the funds are used for riskier behavior than the lender agreed to. 
D)  of the differences between financing using loans, portfolio investment and foreign direct investment. 
A)  firms sometimes have trouble determining whether they need funds or not. 
B)  if investors have trouble identifying high-risk firms they may be unwilling to give money to creditworthy firms. 
C)  there is the possibility that the funds are used for riskier behavior than the lender agreed to. 
D)  of the differences between financing using loans, portfolio investment and foreign direct investment.

Question 9

The acquisition of more than 10 percent of the outstanding shares in a company in another country is

Accepted Answer

A)  foreign direct investment. 
B)  foreign direct acquisition. 
C)  portfolio investment. 
D)  portfolio acquisition. 
A)  foreign direct investment. 
B)  foreign direct acquisition. 
C)  portfolio investment. 
D)  portfolio acquisition.

Question 10

The possibility for recipients of funds in foreign countries to engage in riskier behavior after receiving financing is called

Accepted Answer

A)  inequitable financing. 
B)  moral hazard. 
C)  adverse selection. 
D)  asymmetric information. 
A)  inequitable financing. 
B)  moral hazard. 
C)  adverse selection. 
D)  asymmetric information.

Question 11

A multinational organization that aims to promote world economic growth through more financial stability is the

Accepted Answer

A)  Federal Reserve System. 
B)  World Bank. 
C)  International Monetary Fund. 
D)  International World Fund. 
A)  Federal Reserve System. 
B)  World Bank. 
C)  International Monetary Fund. 
D)  International World Fund.

Question 12

Approximately what percentage of the World Bank's loans go to developing nations in the East Asia/Pacific and South Asia regions combined?

Accepted Answer

A)  5% 
B)  35% 
C)  70% 
D)  100% 
A)  5% 
B)  35% 
C)  70% 
D)  100%

Question 13

China is regarded as one of the emerging nations because

Accepted Answer

A)  China has experienced high population growth. 
B)  China has experienced high economic growth. 
C)  economic and political freedoms in China are still limited. 
D)  per capita real GDP is now higher in China than in the United States. 
A)  China has experienced high population growth. 
B)  China has experienced high economic growth. 
C)  economic and political freedoms in China are still limited. 
D)  per capita real GDP is now higher in China than in the United States.

Question 14

The World Bank

Accepted Answer

A)  determines the price level in each of its member nations. 
B)  determines the labor force participation rate in each of its member nations. 
C)  mediates contracts regarding minimum prices for various globally-traded commodities. 
D)  extends long-term loans for capital investment projects to developing nations. 
A)  determines the price level in each of its member nations. 
B)  determines the labor force participation rate in each of its member nations. 
C)  mediates contracts regarding minimum prices for various globally-traded commodities. 
D)  extends long-term loans for capital investment projects to developing nations.

Question 15

A quota subscription is

Accepted Answer

A)  the maximum amount of funds that can be drawn at the World Bank without a formal proposal. 
B)  the maximum amount that a private investor can invest in foreign firms. 
C)  a nation's account at the International Monetary Fund. 
D)  when an investor sets limits on the proportion of their portfolio that will contain foreign investments. 
A)  the maximum amount of funds that can be drawn at the World Bank without a formal proposal. 
B)  the maximum amount that a private investor can invest in foreign firms. 
C)  a nation's account at the International Monetary Fund. 
D)  when an investor sets limits on the proportion of their portfolio that will contain foreign investments.

Question 16

A reduction in the rate of population growth

Accepted Answer

A)  always causes an increase in economic growth. 
B)  never causes an increase in economic growth. 
C)  may or may not cause an increase in economic growth. 
D)  will cause a reduction in economic growth if accompanied by an increase in the rate of growth of real GDP. 
A)  always causes an increase in economic growth. 
B)  never causes an increase in economic growth. 
C)  may or may not cause an increase in economic growth. 
D)  will cause a reduction in economic growth if accompanied by an increase in the rate of growth of real GDP.

Question 17

The amount of funds that a nation can withdraw from the International Monetary Fund depends upon

Accepted Answer

A)  its quota subscription. 
B)  whether it is a developing nation or a developed nation. 
C)  whether it is seeking a long-term or short-term loan. 
D)  the rules set up by the World Bank. 
A)  its quota subscription. 
B)  whether it is a developing nation or a developed nation. 
C)  whether it is seeking a long-term or short-term loan. 
D)  the rules set up by the World Bank.

Question 18

Any capital resource that lacks clear title ownership is

Accepted Answer

A)  public capital. 
B)  dead capital. 
C)  social capital. 
D)  human capital. 
A)  public capital. 
B)  dead capital. 
C)  social capital. 
D)  human capital.

Question 19

The International Monetary Fund

Accepted Answer

A)  is a central bank like the Federal Reserve System. 
B)  is the bank that causes international financial crisis when the reserves are too high. 
C)  is a multinational agency that specializes in making loans to promote long-term development and growth in developing countries. 
D)  is a multinational organization that aims to promote world economic growth through more financial stability. 
A)  is a central bank like the Federal Reserve System. 
B)  is the bank that causes international financial crisis when the reserves are too high. 
C)  is a multinational agency that specializes in making loans to promote long-term development and growth in developing countries. 
D)  is a multinational organization that aims to promote world economic growth through more financial stability.

Question 20

The three sources of private direct investment in developing nations are

Accepted Answer

A)  bank loans, government loans, and Eurobond issues. 
B)  bank loans, portfolio investments, and foreign direct investments. 
C)  portfolio loans, IMF loans, and government loans. 
D)  foreign direct investment, government loans, and Eurobond issues. 
A)  bank loans, government loans, and Eurobond issues. 
B)  bank loans, portfolio investments, and foreign direct investments. 
C)  portfolio loans, IMF loans, and government loans. 
D)  foreign direct investment, government loans, and Eurobond issues.

Exam 18: Policies and Prospects for Global Economic Growth

Dead capital refers to

How have government inefficiencies contributed to the creation of dead capital in the world's developing nations?

Which of the following are NOT part of the World Bank?

Explain the meaning of the term dead capital, and discuss why its existence retards economic growth.

When government inefficiencies exist

What are the sources of private investments in foreign nations?

Two types of asymmetric information that create problems for international investment are

Moral hazard is a barrier to financing global growth because

The acquisition of more than 10 percent of the outstanding shares in a company in another country is

The possibility for recipients of funds in foreign countries to engage in riskier behavior after receiving financing is called

A multinational organization that aims to promote world economic growth through more financial stability is the

Approximately what percentage of the World Bank's loans go to developing nations in the East Asia/Pacific and South Asia regions combined?

China is regarded as one of the emerging nations because

The World Bank

A quota subscription is

A reduction in the rate of population growth

The amount of funds that a nation can withdraw from the International Monetary Fund depends upon

Any capital resource that lacks clear title ownership is

The International Monetary Fund

The three sources of private direct investment in developing nations are

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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