D)
the best policies to follow depend on the institutional structure of a country and the specific situation.
85.
Problems in developing nations can involve:
A)
governments with corrupt officials that increase the costs of starting and maintaining businesses.
B)
too much emphasis on sound business practices and efficiency.
C)
good institutions and reasonable taxes, which provide sufficient infrastructure for new business.
D)
government that is too large to be effective.
86.
Rent-seeking activities include:
A)
bribes.
B)
lobbying.
C)
favoritism.
D)
bribes, lobbying, and favoritism.
87.
Rank these regions in order of economic growth from fastest to slowest: Europe, South America, and Africa.
A)
Europe, Africa, South America
B)
South America, Africa, Europe
C)
Europe, South America, Africa
D)
Africa, South America, Europe
88.
According to the text, there are two reasons we care so much about exchange rates. List and fully explain these reasons in your own words.
89.
What is an exchange rate crisis, and what are the characteristics of an exchange rate crisis?
90.
Explain why/how a fall in the exchange rate of a country can lead to default.
91.
Explain what is meant by the globalization of finance, and describe the trends in this area since 1970. Be sure to distinguish between the trends in advanced, emerging, and developing countries.
92.
Explain why the current account balance of the world is zero.
93.
What is the relationship between income, expenditure, current account and external wealth?
94.
What is the link between current account imbalances and country risk?
95.
What are the differences between a policy, a regime, and an institution?
96.
Compare and contrast policies, regimes and institutions as they relate to government action.
97.
"Governance" is an important element in economic success and prosperity for any nation. List at least four of the six dimensions presented in the text that are highly correlated with good economic outcomes.
98.
The study of international macroeconomics will enable you to understand important issues and identify good solutions to problems and tensions. Name several items in the study of international macroeconomics, an understanding of which can help clarify and instruct policy and governance.
99.
What are the six characteristics of “good” institutions, and why are they considered good (i.e., what are the benefits of good institutions)?
100.
What role does history play in the “Great Divergence”?
Answer Key
1.
C
2.
B
3.
B
4.
D
5.
C
6.
C
7.
D
8.
B
9.
B
10.
C
11.
C
12.
B
13.
B
14.
B
15.
C
16.
A
17.
A
18.
B
19.
A
20.
D
21.
B
22.
B
23.
B
24.
B
25.
C
26.
C
27.
D
28.
C
29.
B
30.
D
31.
A
32.
A
33.
B
34.
A
35.
C
36.
C
37.
D
38.
B
39.
A
40.
D
41.
C
42.
A
43.
C
44.
C
45.
B
46.
C
47.
A
48.
C
49.
D
50.
C
51.
B
52.
D
53.
C
54.
D
55.
B
56.
C
57.
B
58.
B
59.
A
60.
A
61.
D
62.
C
63.
D
64.
B
65.
B
66.