All of the following contributed to a surge in international lending to developing countries in the mid-1970s to early 1980s EXCEPT
A. There was widespread pessimism about the profits that could be earned through new business investments in the industrial countries.
B. The governments of the developing countries discouraged foreign direct investment (FDI).
C. Oil-exporting countries had a high short-run propensity to save out of their extra income.
D. Oil-exporting countries invested most of their increased savings in government bonds issued by developing-country governments.
Answer: D
You might also like to view...
Consumers in a country buy only two goods, pens and CDs. The prices and quantities purchased by urban households are in the table above. If 2011 is the reference base year, the cost of the CPI market basket in the base year is
A) $3,400. B) $3,408. C) $3,580. D) $3,508. E) $3,500.
When the economy is at full employment and inflation develops, the government creates a surplus budget by cutting its own spending and raising taxes. The Fed would
a. reduce the legal reserve requirement, increase the discount rate, and buy securities on the open market b. reduce the legal reserve requirement, reduce the discount rate, and sell securities on the open market c. reduce the legal reserve requirement, reduce the discount rate, and buy securities on the open market d. increase the legal reserve requirement, reduce the discount rate, and sell securities on the open market e. increase the legal reserve requirement, increase the discount rate, and sell securities on the open market
Why do people often hold money instead of bonds?
A. Bonds pay interest. B. Money is less liquid than bonds. C. Money is needed for transactions. D. Of the two, only money is a store of wealth.
If aggregate demand shifts from AD1 to AD2,
A. both output and the price level will rise.
B. output will rise and the price level will fall.
C. output will rise and the price level will remain the same.
D. both output and the price level will fall.