A)
a common European defense system supplemented by radar and strategic monitoring systems
B)
a trade agreement among the nations of Europe not to impose tariffs on one another
C)
a group of European nations that have adopted a common currency
D)
regions of the world that allow traders to make bank deposits in euros
75.
The idea of dollarization is:
A)
the use of domestic currency in a variable proportion with neighboring countries' currency.
B)
the use of the U.S. dollar for paying the native country's debt.
C)
a nation's use of a foreign currency over which it has no policy control.
D)
the use of domestic currency in countries in Europe that are not part of the European Union.
76.
Economic institutions are important in helping to govern and determine economic outcomes. Which of the following would NOT be an example of an economic institution?
A)
the existence of various regulatory agencies, such as the Securities and Exchange Commission, that affect the integrity of the investment community
B)
First National Bank of Chicago
C)
the tendency of the public to deposit funds in banks and financial institutions, which are considered safe, rather than purchasing gold or jewelry
D)
disclosure provisions in investment contracts
77.
Poor governance often results in:
A)
insurgency and chaos.
B)
more poverty and macroeconomic shocks.
C)
less equality but more efficiency.
D)
the rich putting their money in overseas banks.
78.
The great divergence refers to:
A)
the widening U.S. trade deficit.
B)
the growing gap between rich and poor workers.
C)
the growing Chinese trade surplus.
D)
the gap in income per capita between rich and poor nations.
79.
The income gap between rich and poor nations has _____ over the last two decades and is the largest in history.
A)
doubled
B)
tripled
C)
grown by 10 times
D)
grown by 50 times
80.
Policies that work well in stable, well-governed nations:
A)
may not work well in poor nations if these nations lack stability and good governance.
B)
should be looked at as an alternate policy regime for poor nations.
C)
often do not represent the best policies for other rich nations.
D)
tend to be less desirable during election years or in times of political upheaval.
81.
Economists say that the relationship between good institutions and good economic results is that:
A)
good institutions are essential to good economic outcomes.
B)
good economic outcomes enable a society to build good institutions.
C)
good institutions are not necessary for good government and good economic outcomes.
D)
good economic results are usually based on access to essential natural resources and a competent labor force—not on access to societal institutions.
82.
Optimal policies and policy regimes generally:
A)
require standard approaches.
B)
require different approaches in rich and poor countries.
C)
have similar results in both rich and poor countries.
D)
require the government to be authoritarian.
83.
Countries with good institutions have:
A)
higher per capita income.
B)
greater income volatility.
C)
higher per capita income and greater income volatility.
D)
lower per capita income.
84.
The main lessons of the study of international macroeconomics are that:
A)
there is a consensus regarding the best policies to follow.
B)
poor countries will become rich if they just adopt the institutions of the rich countries.
C)
financial openness will quickly lead to economic growth.