Outline the elements of an IMF stabilization package. Explain the mechanism by which it is expected to help a balance of payments deficit. How successful have these packages been? Explain your answer.
What will be an ideal response?
Question 2 - Nicaragua in the early 2000s set its exchange rate with the U.S. dollar to decrease monthly by 1. This is an example of
A) a crawling peg.
B) bad currency management.
C) a parity band.
D) a currency board.
Question 3 - Suppose that a developing country devotes extensive resources towards improving the education and skill level of the labor force.
How might this help the country avoid a coordination failure? Is this strategy likely to be successful? Why or why not?
Question 4 - Nongovernmental organizations
a. provide aid from private sources
b. help administer some government aid
c. are often able to address sensitive issues that government agencies cannot
d. are important sources of disaster relief funds
e. all of the above
Question 5 - The Todaro model suggests that rural urban migration depends on
a. the gap between rural and urban wages
b. the gap between rural and urban wages modified by the likelihood of obtaining a job in the city
c. the gap between rural and urban wages modified by the likelihood of having a family member alreadyin the city
d. the gap between rural and urban wages modified by government-provided employment possibilities inthe city
e. none of the above
Question 6 - The supply of public school places is determined by
(a) individuals' demand for education.
(b) direct and indirect costs of schooling.
(c) political processes, often unrelated to economic criteria.
(d) all of the above.
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