Which of the following is a reason that developing countries are running large surpluses?
A) They are required to do so by IMF.
B) They have defaulted on international loans.
C) They have pegged exchange rates and thus the growth of exports must drive surplus up.
D) They have a strong desire to accumulate international reserves to protect against a sudden stop of capital inflows.
E) They don't know how to manage their surpluses.
D
You might also like to view...
Trade restrictions
A. Increase the standard of living for the country as a whole. B. Reduce the number of hours employees must work. C. Reduce the gains from trade for the country as a whole. D. Increase the gains from trade for poor countries.
Demand for the product of an industry in perfect competition is assumed to be inelastic.
Answer the following statement true (T) or false (F)
The nominal annual wage increases from $20,000 to $21,000 while the price level increases by 7 percent. In this case, the percentage change in the real annual wage is about:
A. -1 percent B. -2 percent C. 3 percent D. 5 percent
If the dollar appreciates,
a. imports to the United States become more expensive for foreigners b. exports from the United States become more expensive for foreigners c. imports become more expensive for U.S. citizens. d. exports from the United States become cheaper e. the dollar will exchange for fewer units of a foreign currency