Economics MCQs

Page No. 367

Initial conditions in the year before the crisis in Thailand Indonesia Malaysia the Philippines and Korea in 1997 indicate that ? 0 i. capital inflows/GDP were very low ii. Nonperforming bank loan ratios were high iii. current account deficits were high iv. credit growth was fast


aI and IV only

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bII and III only

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cI, II and III only

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dII, III and IV only

✓


View Answer II, III and IV only

Which of the following country was not a major LDC debtor in 2001 ?


aBrazil

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bArgentina

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cThailand

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dMalaysia

✓


View Answer Malaysia

The debt-service ratio is the______________?


along-term debt divided by GDP of a country in a given year

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b interest and principle payments divided by exports of goods and services

✓


cratio of debt net of portfolio investment financing and foreign direct investment

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ddefault and reschedule debt minus annual export revenues that must be devoted to paying interest

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Which of the following is will NOT reduce capital flight from source countries ?


a dependable positive real interest rates

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bhigher taxes on capital gains

✓


c more efficient state enterprises

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dmarket liberalization

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Which of the following is Not true about external debt ?


aExternal debt accumulates with international balance on goods services and income deficcits

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bWhen debts are denominated in U.S dollars their appreciation during the 1990s increased the cost of servicing such debts

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cIn the 19901s LDCs relied increasingly on aid from DCs

✓


dInternational lenders required LDC governments to guarantee private debt

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In 1990, during the Persian Gulf War, the U.S government extended generous terms to two middle-income countries by canceling or reducing their debt The two countries were ?


aIraq and Iran

✖


bEgypt and Poland

✓


cPakistan and Afghanistan

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dSaudi Arabia and Jordan

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View Answer Egypt and Poland

Highly-indebted poor countries (HIPCs) include________________? I- Bolivia II- Benin III- Uganda IV- Tanzania


a I and II only

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bI, II , III only

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cI, III and IV only

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d I, II , III and IV

✓


View Answer I, II , III and IV

The policy cartel on debt reduction refers to the_______________?


ascreening of debtors based on their regional location

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bWorld Bank requiring LDCs seconded by a DC to get loan reduction

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cloan denial to crisis-stricken highly indebted countries

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dNone of the above

✓


View Answer None of the above

Mosley Harrigan and Toye refer to the IMF and World Bank as________________?


aexcessively committed to writing down LDC debt

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b a managed duopoly of policy advice

✓


c a U.S monoply

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d the initiator of HIPCs debt forgiveness

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Fundamentalists want the IMF to lend to crisis-stricken countries on condition that they undertake fundamental structural reforms in banking Joseph Stiglitz however thinks it is______________?


a unrealistic for IMF to intervene in the financial markets of poor countries during the crisis

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b impractical for the IMF to loan short term as reforms can only be effective in the middle to long run

✓


ccrucial that the IMF intervene in the reform of fiscal policy of the country and not the monetary policy

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dNone of the statements above is correct

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