17. If a developing country makes its currency fully convertible, it runs the ri

Question

17. If a developing country makes its currency fully convertible, it runs the risk of having too: A. low levels of domestic saving and investment. B. high levels of domestic saving and investment. C. much domestic saving and not enough domestic investment. D. little foreign investment. 18. Many developing countries face a balance of payments constraint because: A. they hold too many international reserves. B. they hold too few international reserves. C. the IMF forces them to adopt policies that are counterproductive. D. they fail to implement exchange rate policy correctly.

Explanation / Answer

17.

the correct option is A

i.e low level of domestic saving and investment

18.

the correct option is B.

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