56. One economic advantage of a large share of exports in GDP is that countries

Question

56. One economic advantage of a large share of exports in GDP is that countries

Select one:

a. can maintain lower rates of unemployment.

b. can purchase the imports they need.

c. will have greater equality in their incomes.

d. can reduce their budget deficits.

e. develop more labor-intensive industry.

57. The experience of the HPAEs has brought attention to predictions about income inequality made by Kuznets. He predicted that at first income inequality would ________ as economies began to develop. In the HPAEs experience it ________.

Select one:

a. decrease; decreased

b. rise; fell

c. rise; rose

d. fall; rose

e. There was no pattern.

58. The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused

Select one:

a. a reduction in inequality.

b. the adoption of strongly contractionary policies to reduce consumption and government deficits.

c. the adoption of expansionary policies to return to growth.

d. large capital inflows to service the debt.

e. an intensification of industrial policies targeted on import substitutes.

59. What is the best explanation for why China and India have received so much international interest and foreign investment?

Select one:

a. Government incentives provided to foreign firms

b. Their large populations

c. Their geographic location

d. Their control over natural resources

60. The international institution that serves as a lender of last resort is called the

Select one:

a. WTO.

b. IBRD.

c. GATT.

d. IMF.

e. World Bank.

Explanation / Answer

a) "A"

An exporting nation can maintain a lower rate of unemployment. Exporting need to employ more people and that reduces the unemployment in the nation.

b) "B"

First income inequality will rise and then it will fall.

c) "B"

COntractionary policy to reduce government expenditure and deficits, we also call it austerity measures.

d) "B"

Their large population.

e) "D"

IMF is the lender of last resort.

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