Question 1

Explain the reasons for export pessimism in Latin American countries.

Accepted Answer

The answer of Explain the reasons for export pessimism in...

Question 2

Many economist believe that misguided macroeconomic policies did more to create the Debt Crisis of the 1980s than ISI.

Accepted Answer

A) True 
 B)False

Question 3

Indirectly,overvalued exchange rates in Latin America caused

Accepted Answer

A) a capital shortage in agriculture. 
B) a capital shortage in industry. 
C) a capital abundance in agriculture. 
D) an increase in competitive pressures faced by industry.

Question 4

Private capital flows in the form of both direct and portfolio investment began to return to Latin America after 1989,effectively marking the end of the Lost Decade.

Accepted Answer

A) True 
 B)False

Question 5

An economic populist movement

Accepted Answer

A) is likely to create long-term economic stability. 
B) favors promotion of export-based industries and fiscal austerity. 
C) is less likely to use expansionary policy due to inflation risks. 
D) uses economic tools to obtain support from labor and domestically oriented businesses.

Question 6

Alan Garcia

Accepted Answer

A) in his first Presidency in Peru, followed free market economic policies. 
B) nationalized the property of the financial services sector during his first Presidency. 
C) was never freely elected in Peru and ruled with the support of the military. 
D) maintained balanced budgets and helped Peru avoid the economic problems most Latin American nations were experiencing in the 1980s.

Question 7

Most analysts in the United States and the international financial community initially perceived the debt crisis as a temporary,short-run liquidity problem so they advised increasing capital flows to Latin America.

Accepted Answer

A) True 
 B)False

Question 8

Latin America

Accepted Answer

A) is significantly smaller than the NAFTA market in terms of population. 
B) has a smaller population, but a larger GDP than the NAFTA market. 
C) has a larger population than the NAFTA market. 
D) is similar in population to the NAFTA market.

Question 9

The reform movements that began in many Latin American economies in the late 1980s favored

Accepted Answer

A) competitive devaluations. 
B) stronger military budgets. 
C) imports substitution policies. 
D) a stronger role for markets and more openness.

Question 10

What benefits did an overvalued currency offer a domestic economy in the ISI period? Which sectors were typically harmed by overvalued currencies?

Accepted Answer

The answer of What benefits did an overvalued currency offer...

Question 11

Initially,the U.S.and the IMF believed that

Accepted Answer

A) the Debt Crisis would require long-term structural changes. 
B) Latin American economies did not need assistance. 
C) capital inflows would be unable to solve the debt problems. 
D) the Debt Crisis was a temporary liquidity problem.

Question 12

The terms of trade are

Accepted Answer

A) the terms negotiated in a trade agreement. 
B) exports plus imports divided by GDP. 
C) the value of the real exchange rate. 
D) the ratio of export prices to import prices.

Question 13

Today,primary commodities

Accepted Answer

A) are not a major export for most of Latin America. 
B) are highly valued relative to manufactured goods. 
C) have benefited from increased demand from growing world economies. 
D) are not subject to business cycles.

Question 14

One of the main causes of economic inequality in Latin America is the

Accepted Answer

A) failure of governments to support urban consumers. 
B) lack of progress in raising agricultural productivity. 
C) lack of governmental interest in solving the problem of inequality. 
D) focus of governments on agricultural exports to the detriment of food production.

Question 15

From 1900 to 1960,Latin America's real GDP grew

Accepted Answer

A) slower than Europe, Asia, and the U.S. 
B) as fast or faster than Europe, Asia, and the U.S. 
C) faster than Europe and the U.S. but slower than Asia. 
D) faster than Asia, but slower than Europe and the U.S.

Question 16

An orthodox model calls for cutting government spending,reforming the tax system to increase compliance and revenues,and limiting the creation of new money.

Accepted Answer

A) True 
 B)False

Question 17

Briefly describe orthodox stabilization policies.

Accepted Answer

The answer of Briefly describe orthodox stabilization policies....

Question 18

The concept of "economic pessimism" stems from

Accepted Answer

A) the theory and empirical fact which states that developing nations face declining export prices relative to increasing import prices. 
B) the fact that economic growth in an era of globalization is difficult to attain. 
C) the fact that smaller countries would not enjoy comparative advantage unless they are allowed to subsidize some of their industries. 
D) the fact that it is impossible to achieve desired economic development without adopting full democratic principles.

Question 19

What is called for with heterodox stabilization policies?

Accepted Answer

The answer of What is called for with heterodox stabilization...

Question 20

One problem of ISI was

Accepted Answer

A) the failure to consider that government officials may make inefficient decisions. 
B) the overemphasis on improvements in the rural rather than the urban sector. 
C) the oversupply of complex technical goods. 
D) the undervaluation of currencies to promote export growth.

Exam 15: Trade and Policy Reform in Latin America

Explain the reasons for export pessimism in Latin American countries.

Many economist believe that misguided macroeconomic policies did more to create the Debt Crisis of the 1980s than ISI.

Indirectly,overvalued exchange rates in Latin America caused

Private capital flows in the form of both direct and portfolio investment began to return to Latin America after 1989,effectively marking the end of the Lost Decade.

An economic populist movement

Alan Garcia

Most analysts in the United States and the international financial community initially perceived the debt crisis as a temporary,short-run liquidity problem so they advised increasing capital flows to Latin America.

Latin America

The reform movements that began in many Latin American economies in the late 1980s favored

What benefits did an overvalued currency offer a domestic economy in the ISI period? Which sectors were typically harmed by overvalued currencies?

Initially,the U.S.and the IMF believed that

The terms of trade are

Today,primary commodities

One of the main causes of economic inequality in Latin America is the

From 1900 to 1960,Latin America's real GDP grew

An orthodox model calls for cutting government spending,reforming the tax system to increase compliance and revenues,and limiting the creation of new money.

Briefly describe orthodox stabilization policies.

The concept of "economic pessimism" stems from

What is called for with heterodox stabilization policies?

One problem of ISI was