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15 Cards in this Set
- Front
- Back
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1. The flow of private foreign investment and grants and loans is included in a country’s (a) current account. (b) capital account. (c) cash account. (d) none of the above. |
(b) capital account. |
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2. Debt service payments appear in (a) the current account. (b) the capital account. (c) the cash account. (d) errors and omissions. |
(a) the current account. |
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3. A typical IMF stabilization package involves (a) erecting barriers against foreign investment. (b) overvaluing the exchange rate. (c) liberalization of exchange controls. (d) a reduction in interest rates. (e) all of the above. |
(c) liberalization of exchange controls. |
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4. The need for exchange controls may arise from (a) overvalued exchange rates. (b) export promotion policies. (c) a current account surplus. (d) all of the above. |
(a) overvalued exchange rates. |
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5. Which of the following was not a factor contributing to the debt crisis in Latin America? (a) The oil shocks. (b) Trade liberalization in many developing countries. (c) An increase in global interest rates. (d) A lack of investment opportunities in the developed countries. (e) All of the above. |
(b) Trade liberalization in many developing countries. |
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Special Drawing Rights are financial assets created by a. the World Bank b. The United Nations Development Program c. multinational corporations d. the International Monetary Fund |
d. the International Monetary Fund |
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Debt equity swaps may lead to a. increased foreign ownership b. greater domestic inflation d. all of the above e. none of the above |
d. all of the above |
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A significant problem of a dual exchange rate system is that is a. is difficult to administer b. leads companies to pursue rent-seeking behavior c. promotes black markets d. All of the above e. none of the above |
d. All of the above |
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A country with high inflation, rising budget and trade deficits, and a rapidly expanding money supply a. is in transition b. has macroeconomic instability c. is practicing import substitution d. is practicing export promotion |
b. has macroeconomic instability |
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Exchange of developing country debt(at a discount) for private ownership of state-owned assets is called a. debt-equity swaps b. debt restructuring c. the Brady Plan d. debt-nature swaps |
a. debt-equity swaps |
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The debt service ratio is the ratio of a. external debt to the size of the service sector b. external debt to total GNP c. internal debt to the size of the service sector d. internal debt to total GNP e. none of the above |
e. none of the above |
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The debt service ratio is defined as a. the ratio of total debt to export earnings b. the ratio of total debt to GDP c. the ratio of payments on foreign debt to export earnings d. the ratio of payments on foreign debt to GDP |
c. the ratio of payments on foreign debt to export earnings |
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If the current account is a deficit of 25 then a. the capital account is a surplus of 25 b. the cash account is a surplus of 25 c. the capital account is a surplus of 25 if the cash account is zero d. the cash account is a deficit of 25 |
c. the capital account is a surplus of 25 if the cash account is zero |
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The basic transfer is defined as a. net capital inflow b. interest payments on foreign debt c. net capital inflow divided by interest payment on foreign debt d. net capital inflow minus interest payments on foreign debt |
d. net capital inflow minus interest payments on foreign debt |
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The concept of odious debt implies a. an excessive debt b. a debt that is not the responsibility of the nation's people c. a large debt burden d. the total external debt of a nation's people |
b. a debt that is not the responsibility of the nation's people |
