Question 1

Please consider Table 22-2 below.   Assuming constant Annual Average Growth Rate in the future,determine the year in which the United States will have the same output per capita as South Korea?

Accepted Answer

(34,365)(1 + 0.025)^t^-2000 = (15,702)...

Question 2

The Convertibility Law of April 1991 in Argentina

Accepted Answer

A)  pegged the Argentinean currency to the US dollar at a ratio of one to one.
B)  pegged the Argentinean currency to the US dollar at a ratio of one to two.
C)  pegged the Argentinean currency to the US dollar at a ratio of one to 0.5.
D)  represents an era of floating exchange rate in Argentina.
E)  pegged the Argentinean currency to the British pound at a ratio of one to one.F) C) and D)
G) B) and C)

Question 3

There are many ways developing countries finance their external deficits EXCEPT

Accepted Answer

A)  bank finance.
B)  portfolio investment in ownership of firms.
C)  bond finance.
D)  official lending.
E)  foreign exchange rates.F) D) and E)
G) C) and D)

Question 4

What do you think about dollarization?

Accepted Answer

This is an open question.The answer is p...

Question 5

In general,one would expect that life expectancies reflect international differences in income levels.Do the data support such a claim?

Accepted Answer

A)  Average life span falls as relative poverty falls.
B)  Average life span increases as relative poverty falls.
C)  There is no statistically significant relationship between the two.
D)  The relation is not very strong.
E)  The relationship looks more like a U-shape.F) A) and D)
G) A) and C)

Question 6

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

Accepted Answer

See for example the vivid exam...

Question 7

The main factors that discourage investment in capital and skills in developing countries are

Accepted Answer

A)  political instability,insecure property rights.
B)  political instability,insecure property rights,misguided economic policies.
C)  political instability,misguided economic policies.
D)  political instability.
E)  insecure property rights,misguided economic policies.F) A) and B)
G) None of the above

Question 8

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

Accepted Answer

A)  Argentina
B)  Brazil
C)  Chile
D)  Colombia
E)  MexicoF) B) and E)
G) B) and D)

Question 9

In 1991,Argentina established a radical institutional reform after experiencing a decade marked by financial instability.This program was called the new Convertibility Law.What did this law do?

Accepted Answer

A)  made Argentina's currency fully convertible into Eurocurrency at a fixed rate
B)  required that the monetary base be backed completely by U.S.dollars
C)  placed limits on exports of commodities
D)  made Argentina's currency fully convertible into U.S.dollars at a fixed rate and required that the monetary base be backed completely by gold or foreign currency
E)  restricted risky international trade activityF) C) and E)
G) A) and C)

Question 10

How would you describe the world distribution of income?

Accepted Answer

A)  persistently unequal
B)  temporarily unequal
C)  converging
D)  fairly equal
E)  completely unpredictableF) A) and E)
G) A) and D)

Question 11

The relationship between annual real per-capita GDP and corruption across countries has been found to be

Accepted Answer

A)  negative.
B)  positive.
C)  The relationship was negative in the late 1960s but is now positive.
D)  The relationship was in the late 1960s but is now negative.
E)  There is no relationship between these two variables.F) A) and E)
G) A) and C)

Question 12

Which of the following are characteristic of a developing country?

Accepted Answer

A)  extensive embrace of free trade policies
B)  low inflation
C)  high national savings
D)  a current account deficit and low national savings
E)  strong credit institutionsF) A) and D)
G) None of the above

Question 13

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Accepted Answer

When a country's liabilities are in the ...

Question 14

Since 1960,South Korea and Singapore enjoyed an average per-capita growth rates ________ the average industrialized world.

Accepted Answer

A)  far below
B)  far above
C)  about the same
D)  slightly below
E)  slightly aboveF) B) and E)
G) None of the above

Question 15

Explain the theory behind convergence and why it is a "deceptively simple" theory.

Accepted Answer

Convergence is the tendency for gaps bet...

Question 16

Explain why East Asian countries have done so well relative to South American countries.

Accepted Answer

Mainly,the reasons are: less m...

Question 17

"Developing countries should delay opening the capital account until the domestic financial system is strong enough to withstand the sometimes violent ebb and flow of world capital." Discuss.

Accepted Answer

Probably true.The issue is rel...

Question 18

Does it appear that currency boards make low-inflation policies credible?

Accepted Answer

Currency boards have the power to bring ...

Question 19

In general,the development of underground economic activity ________ economic efficiency

Accepted Answer

A)  hinders
B)  has no effect
C)  aides
D)  hard to tell,sometime hinders,sometimes aides
E)  spikesF) C) and D)
G) A) and B)

Question 20

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

Accepted Answer

By introducing a new currency and initia...

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

Explain how Brazil was able to reduce the rate of inflation from 2,669 percent in 1994 to less than 10 percent in 1997?

Correct AnswerverifiedBy introducing a new currency and initia...View AnswerShow Answer

"Developing countries should delay opening the capital account until the domestic financial system is strong enough to withstand the sometimes violent ebb and flow of world capital." Discuss.

Correct AnswerverifiedProbably true.The issue is rel...View AnswerShow Answer

How would you describe the world distribution of income?

Correct AnswerverifiedShow Answer

The main factors that discourage investment in capital and skills in developing countries are

Correct AnswerverifiedShow Answer

Which of the following are characteristic of a developing country?

Correct AnswerverifiedShow Answer

Which Latin American country defaulted on loans in 2005 and paid off their creditors at only 1/3 value?

Correct AnswerverifiedShow Answer

Explain why East Asian countries have done so well relative to South American countries.

Correct AnswerverifiedMainly,the reasons are: less m...View AnswerShow Answer

There are many ways developing countries finance their external deficits EXCEPT

Correct AnswerverifiedShow Answer

What do you think about dollarization?

Correct AnswerverifiedThis is an open question.The answer is p...View AnswerShow Answer

In general,one would expect that life expectancies reflect international differences in income levels.Do the data support such a claim?

Correct AnswerverifiedShow Answer

The relationship between annual real per-capita GDP and corruption across countries has been found to be

Correct AnswerverifiedShow Answer

Does it appear that currency boards make low-inflation policies credible?

Correct AnswerverifiedCurrency boards have the power to bring ...View AnswerShow Answer

Explain the theory behind convergence and why it is a "deceptively simple" theory.

Correct AnswerverifiedConvergence is the tendency for gaps bet...View AnswerShow Answer

The Convertibility Law of April 1991 in Argentina

Correct AnswerverifiedShow Answer

Since 1960,South Korea and Singapore enjoyed an average per-capita growth rates ________ the average industrialized world.

Correct AnswerverifiedShow Answer

Please consider Table 22-2 below. Assuming constant Annual Average Growth Rate in the future,determine the year in which the United States will have the same output per capita as South Korea?

Correct Answerverified(34,365)(1 + 0.025)t-2000 = (15,702)...View AnswerShow Answer

Explain why the distinction between debt and equity finance is useful in analyzing the response of developing countries to unforeseen events such as recession or terms of trade change?

Correct AnswerverifiedWhen a country's liabilities are in the ...View AnswerShow Answer

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

Correct AnswerverifiedSee for example the vivid exam...View AnswerShow Answer

In 1991,Argentina established a radical institutional reform after experiencing a decade marked by financial instability.This program was called the new Convertibility Law.What did this law do?

Correct AnswerverifiedShow Answer

In general,the development of underground economic activity ________ economic efficiency

Correct AnswerverifiedShow Answer

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By introducing a new currency and initia...
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Probably true.The issue is rel...
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Mainly,the reasons are: less m...
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Correct Answer
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This is an open question.The answer is p...
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Correct Answer
verified

Correct Answer
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Correct Answer
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Currency boards have the power to bring ...
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Correct Answer
verified
Convergence is the tendency for gaps bet...
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Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
(34,365)(1 + 0.025)^t^-2000 = (15,702)...
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Correct Answer
verified
When a country's liabilities are in the ...
View Answer

Correct Answer
verified
See for example the vivid exam...
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Correct Answer
verified

Correct Answer
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