An exchange of developing country debt for an ownership position in a developing country business is called A) IMF conditionality. B) indirect investment. C) debt-equity swap. D) debt-rescheduling. ANSWER C
Date: September 10th, 2020
When a country’s currency is devalued A) output decreases. B) output increases and the money supply decreases. C) the money supply decreases. D) output decreases and the money supply increases. E) both the output and the money supply increases. ANSWER E
Date: September 10th, 2020
A country’s gross national product (GNP) is A) the value of all final goods and services produced by its factors of production and sold on the market in a given time period. B) the value of all intermediate goods and services produced by its factors of production and sold on the market in a given […]
Date: September 10th, 2020
Suppose the exchange rates between the United States and Canada are in long-run equilibrium as defined by the idea of purchasing power parity. If the law of one price holds perfectly, then differences between U.S. and Canadian rates of inflation would A) have no effect on nominal exchange rates. B) be completely offset by changes […]
Date: September 10th, 2020
To answer the following question, please refer to the figure below. Concentrating only at the lower right quadrant, discuss the effects of a change in U.S. expected inflation. What will be an ideal response? ANSWER Lower right quadrant shows the equilibrium in the U.S. Money Market, where = / A given interest rate R1$ […]
Date: September 10th, 2020
What is the expected dollar rate of return on dollar deposits if today’s exchange rate is $1.10 per euro, next year’s expected exchange rate is $1.165 per euro, the dollar interest rate is 10%, and the euro interest rate is 5%? A) 10% B) 11% C) -1% D) 0% E) 15% ANSWER A
Date: September 10th, 2020
Which of the following is not one of the theories that have emerged as alternatives to the HO model? A) The human skills theory. B) The product life cycle theory. C) The similarity of preferences theory. D) All of the above have been suggested as alternatives to the HO model. ANSWER D
Date: September 10th, 2020
The evidence cited in the chapter using the examples of the East Asia New Industrializing Countries suggests that as international productivities converge, so do international wage levels. Why do you suppose this happened for the East Asian NICs? In light of your answer, what do you think is likely to happen to the relative wages […]
Date: September 10th, 2020
________ refers to the irregular meetings of creditor governments with debtor nations desiring rescheduling of debts. A) The Paris Club B) IMF “conditionality” C) IBF D) LIBOR ANSWER A
Date: September 10th, 2020
Large current account deficits imply large financial account surpluses. Indicate whether the statement is true or false ANSWER TRUE
Date: September 10th, 2020
