The main difference between stabilization policies and structural reform policies is that stabilization policies
A) focus on microeconomic issues and structural reform policies focus on the macroeconomic environment.
B) focus on macroeconomic issues and structural reform policies focus on the microeconomic environment.
C) are rarely used by reform governments; they prefer to use structural reform policies in their place.
D) create less unemployment than structural reform policies.
Question 2 - Ultimate solutions to the problems of unsustainable debt must take into account the incentives for lenders to make loans.
Indicate whether the statement is true or false
Question 3 - The Basel Capital Accord does NOT include
A) requiring bank owners to invest into and have some capital ownership in the banks they own.
B) supervision of banks by an oversight board.
C) information disclosure designed to encourage market discipline.
D) denying access to foreign capital by a country that defaults on its international loans.
Question 4 - Economies of scale are an important determinant of comparative advantage-based trade.
Indicate whether the statement is true or false
Question 5 - The Baker Plan for addressing the debt crisis was based on the assumption that
A) most countries would eventually default on their debt.
B) forgiveness of some of the debt was inevitable.
C) hyperinflation would eventually reduce the real value of the debt.
D) renewed lending by U.S. and European banks would restore growth and make the debt manageable.
Question 6 - For countries such as the United States and the United Kingdom, it is important to have trade surpluses in order to service their external debts.
Indicate whether the statement is true or false
Question 7 - Which one of the following countries refused to accept the IMF conditions during the East Asian financial crisis?
A) South Korea
B) Malaysia
C) Thailand
D) Singapore