Comparative Advantage
crisis
c. macroeconomic reform and structural adjustment lending
d. volunteerism and an emphasis on human capital
e. all of the above
_____15. With regard to current world debt
a. Total world debt is falling due to falling interest rates
b. Public sources of aid constitute an increasing percentage of total aid to developing countries
c. Most developing countries have been able to reduce their debt load
d. More commercial and private debt is coming from private sources such as foreign direct investment, bonds and the stock market
e. all of the above
_____16. Both the Mexican peso crisis and the Asian financial crisis demonstrated that
a. strict adherence to IMF policy reform is essential for success
b. capital markets must operate independently
c. due to increased trade integration, financial instability in one part of the world can have significant impacts on trade deficits in another part of the world
d. high interest rates must accompany low rates of inflation
e. all of the above
_____17. Many developing countries adopted parastatal agencies and state-regulated pricing policies to:
a. generate government revenue to assure debt repayment
b. create “temporary” market structures after colonial independence
c. establish prices for inputs and outputs given the lack of well-defined and functioning market demand and market supply after independence
d. counter the foreign influence that these countries had suffered
e. all of the above
_____18. Endogenous Growth Theory is an argument used for
a. how the conversion of agricultural commodities to manufactured goods stimulates an economy
b. understanding how countries gains from trade integration through increased specialization, efficiency, economies of scale, and returns to investment capital
c. why inferior genetic pools in the Third World will drag down the entire human population through increased population growth
d. explaining why all countries require financial assistance at one time or another
_____19. A strong currency tends to
a. reduce the trade deficit
b. make the BOT more positive
c. make the BOC more negative
d. may make the BOP more positive or more negative, depending on relative exchange rates and interest rates
e. all of the above
_____20. The World Bank claims the consensus on the future of development policy includes all [next page]