Beginning in about 1990, lending to and investing in developing countries began to increase. One explanation for this is that
A. interest rates in the United States were low.
B. the governments in the developing countries began to encourage import-substituting manufacturing.
C. after the successful Brady Plan, bank lending again became much more than half of all financial flows to developing countries.
D. more developing countries began to offer insurance against exchange-rate risk.
Answer: A
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Which of the following components of aggregate expenditure is most subject to crowding out?
a. Consumption expenditures b. Investment spending c. Imports d. Government purchases of goods and services e. National saving
Disposable income is defined to be:
A. total income minustaxes. B. total income plus taxes. C. total income minus depreciation. D. All of these are true.
Rhonda has started a new job that almost doubles her income. She walks past the inexpensive ramen in the grocery store and thinks, “Well, I don’t have to eat that anymore!” Instead, she purchases some fresh vegetables and a steak. To Rhonda, the ramen falls into the category of _____________, because now that she can afford better, she doesn’t want it.
a. normal goods b. temporary goods c. inferior goods d. nonutility goods
A sign that Country A is under pressure to devalue its currency is its:
a. Overall balance is in surplus. b. Financialaccount is in deficit. c. Overall balance is in deficit. d. Reserves account is in deficit (i.e., negative). e. All of the above.