Explain how the Russian crisis of 1998 began. What precipitated the crisis?
What will be an ideal response?
POSSIBLE RESPONSE: Russia had a large government budget deficit and the government borrowing led to rapid increases in government debt to both domestic and foreign lenders. In mid-1998, lenders balked at buying still more Russian government debt. In July 1998, the International Monetary Fund (IMF) organized a lending package. The exchange rate value of the ruble came under severe pressure as capital flight by wealthy Russians led to large sales of rubles for foreign currencies. Investor confidence declined, with selling pressure driving down Russian stock and bond prices. In August 1998, the Russian government announced drastic measures and "restructured" its ruble-denominated debt. It placed a 90-day moratorium on payments of many foreign currency obligations of banks to protect Russian banks and allowed the ruble to depreciate by shifting to a floating exchange rate. Russia requested the next installment of its loan from the IMF but the IMF refused, because the government failed to meet the conditions for fiscal reforms.
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Microeconomics is concerned with:
a. some specific market in the economic system. b. the entire economic system. c. reducing national unemployment and inflation rates. d. what causes changes in the overall level of economic activity.
The principal argument against comparable worth is that the demand and supply of labor in the labor market allocates workers to where they are needed the most
a. True b. False Indicate whether the statement is true or false
If the expected profitability of a business activity increased we might expect investment spending to:
A. remain constant. B. decrease. C. increase. D. there is not enough information to determine what would happen.
If the opportunity costs of producing a good increase as more of that good is produced, the economy's production possibility frontier will be
A. a negatively sloped straight line. B. negatively sloped and "bowed inward" toward the origin. C. negatively sloped and "bowed outward" from the origin. D. a positively sloped straight line.