Describe the background factors that contributed to the Asian financial crisis
What will be an ideal response?
Investors were seeking higher growth and government policies were thought to be very stable and favorable for growth in this region, so there were tremendous capital inflows. Most currencies were pegged to the U.S. dollar and the dollar was appreciating internationally, causing the real exchange rates to be overvalued. Export earnings were damaged by the currency values. These revealed other weaknesses in corporate structures, regulatory systems, and the financial sector, especially in the area of transparency.
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Banks in Richland charge an interest rate of 4% for overnight loans to each other. How will this rate change if the central bank of Richland engages in open market operations to purchase bonds?
What will be an ideal response?
The effective rate of protection is a weighted average of nominal tariffs and tariffs on imported inputs
It has been noted that in most industrialized countries, the nominal tariffs on raw materials or intermediate components or products are lower than on final-stage products meant for final markets. Why would countries design their tariff structures in this manner? Who tends to be helped, and who is harmed by this cascading tariff structure?
Have Malthus' predictions about population growth come true?
A) no, because modern birth control has limited population growth in all nations B) yes, as evidenced by the famine and food shortages affecting every nation today C) no, because the world's food supply has grown much more rapidly than Malthus foresaw D) Yes. The world's food supply, measured by calories per person, continues to fall.
If a 20 percent decrease in the price of chicken results in a 10 percent increase in the quantity demanded, the price elasticity of demand has a value of
a. 0.5 b. 2 c. 1 d. 0.1 e. none of these