asia

Which of the following is the main function of the International Monetary Fund (IMF)?

To loan reserves to countries that are attempting to finance temporary deficits.

A Chaebol refers to:

a large business conglomerate, typically owned by a single family, operated with substantial government assistance.

acc to Paul Krugman, the Myth of Asias Miracle 1960-1994 the growth accounting shows that the major contributor of growth in GDP, of these high performing Asian economies has been

all a,b, and c are factors for growth

Countries such as Taiwan Singapore and Indonesia adopted the Managed Float exchange rate system. managed float implies

an exchange rate which is generally floating but with government willingness to intervene to attempt to influence the equilibrium value of the rate

M The 1993 World Bank study entitled "The East Asian Miracle" identifies eight common characteristics shared among the HPAEs. Which of the following is NOT one of them?

an increase in rate of population growth

in developing countries why is the rate of natural increase tend to rise sharply i the early stage of development?

as the developing countries become more developed the death rate falls sharply while birth rate remains at same level for periods of time.

Figure 1 represents the market for Thailand's currency. Suppose that the initial equilibrium exchange rate of baht was E1, where S1 crossed D1. Then assume that foreign investors lose confidence in Thai economy and thus dump-sell their baht-denominated assets in Thailand. If Thailand's central bank wants to peg the exchange rate at its initial level E1,

baht will be overvalued and there will be a surplus of baht by the amount CE.

Figure 1 represents the market for Thailand's currency. Suppose that the initial equilibrium exchange rate of baht was E1, where S1 crossed D1. Then assume that foreign investors lose confidence in Thai economy and thus dump-sell their baht-denominated assets in Thailand. If Thailand's central bank wants to peg the exchange rate at its initial level E1, the central bank will have to

buy baht and sell dollar

Thailand, Indonesia, and Malaysia produce 90% of world's natural rubber. They have organized the International Rubber Consortium Limited to coordinate their supply and exporting decisions to maximize joint profits. This type of organization is called a

cartel.

*which of the following countries was NOT one of those severely hit by the east asian financial crisis in 1997?

china

which of the following is NOT the cause of Asian financial crisis

chronic trade surplus in asian economies before the crisis year

which characteristic does NOT belong to a country that tends to adopt a fixed exchange rate system?

closed economy

IMF had proposed the crisis-ridden countires to reduce their domestic absorption what is the domestic absorption?

consumption, investment, and gov spending

Which of the following will shift the demand curve for the Japanese yen to the right?

d. U.S. demand for products imported from Japan increases significantly as Japanese culture becomes more popular in the U.S.

If the domestic currency is initially undervalued, that is below par, the central bank must intervene to sell the _____ currency by purchasing _____ assets.

domestic; foreign

a countries dependency ratio represents

economic burden of a countrys to payoff foreign debt

"Import substitution" refers to:

government policies which aim at replacing imports of foreign products with domestic production of the same goods.

M . According to Lim's S curve hypothesis, the elephant economy tends to:

have high consumption

which of the following pairs correctly matches a country with its exchange rate system?

hong kong- currency board

which trade policy has developing countries used to restrict imports of manufacture gods so that the domestic market is preserved for domestic producers, who thus can take over markets in the country?

import substitution

An advantage of adopting floating exchange rate system is that

it prevents against currency speculation and currency crisis.

whihch is CORRECt about the floating exchange rate regime?

it tends to create pressure for speculative attacks

M The economies of two countries, North and South, have the same production functions, depreciation rates, and saving rates. The economies of each country can be described by the Solow growth model. Population growth is faster in North than in South. According to the Solow growth model, the level of stead-state output per worker will be

larger in South

IMF conditionality refers to:

policy changes that government in a borrowing country has to make in order to borrow from IMF.

When the domestic currency is initially overvalued in a fixed exchange rate regime, the central bank must

purchase domestic currency, meaning that it loses international reserves

Suppose that Thai government commits to maintain stable price of rice. If severe drought has decreased the supply of rice, the price of rice would ________. In order to keep the price at its original level, the government could ____________.

rise; sell rice from the buffer stock to meet excess demand for rice.

consider the market for chinese currency (yuan). suppose that the initial eq exchange rate was $0.125 per one yuan. then assume that American consumers like chinese products more than before

thye central bank will have to... buy yuan sell dollar

Figure referring to fig above, world price of rice is 100 per ton imposition of 10 per ton. thailand exports

80:800

According to the Solow Groth model, persistantly rising standards of living can only be explained by

All of the above

M The 1993 World Bank study entitled "The East Asian Miracle" identifies eight highperforming Asian economies. Which of the following is NOT one of them?

CHINA

Suppose that Vietnamese government is contemplating on promote both steel and automotive industries. If they are established simultaneously, then both industries will become profitable and benefit the country as a whole (having one industry without the other will not become profitable). Without an explicit government support in both industries, there is little chance that any entrepreneur would invest and thus neither industry will be established. Which of the following industrialization problems does Vietnam face?

Coordination failure.

*according to the Asian Financial Crisis Ten yrs Later by Yellen (2007) whihc of the following factors does not belong to the 3 VULNERABLILITES that caused the asian crisis?

Crony (buddy) Capitalism *Appreciation of the value of Japanese yen.

Which of the following exchange rate systems is the least flexible?

Currency board

Under flexible exchange rate an increase in the demand for American products by Japanese households will

Decrease the supply of yen and cause the price of yen to appreciate

Which of the following is the central feature of the Bretton Woods system?

Every country fixed its exchange rate to the U.S. dollar.

Which of the following is NOT correct about the Asian-style capitalism?

Government has ownership in all manufacturing firms.

M From 1965 to 1990, the East Asian economies accumulated human capital much more rapidly than other economies. Which of the following public policies was used by the East Asian governments to promote human capital accumulation?

Governments devoted most of their education budget to basic education.

Initial conditions in the year before the crisis in Thailand, Indonesia, Malaysia, the Philippines, and Korea in 1997 indicate that I. capital inflows/GDP were very low. II. nonperforming bank loan ratios were high. III. current account deficits were high. IV. domestic credit market grew fast.

II, III and IV only

. What is the Green Revolution?

International effort to develop high-yielding varieties of rice.

Which of the following is "chaebol"?

LG group

IMF conditionally refers to

Macroeconomic policy changes that gov in a borrowing country has to make in order to borrow from IMF

Which of the following terms describes an exchange rate regime in which the government intervenes in the foreign exchange market in order to influence the market determined exchange rate?

Managed float

M Which of the following statements is CORRECT? a. Demographic transition explains the decline in the rate of natural increase when the birth and death rates decline together at the same time as a society becomes more developed. b. Dependency ratio is the economic burden that citizens must bear as a country accumulates foreign debts.

NEITHER are correct

According to the study by Radelet, Sachs and Lee (1997) to study the determinants of economic growth, they use the ratio of primary product exports to GDP as a measurement of a countries_____

Natural Resource Abundance

empirical evidence from Radelet, Sachs and Lee find that

Natural resource abundance increases economic growth

Which is TRUE 1. in the Bretton Woods system, every countrys currency was fixed gold. 2. Today, no country fixes its currency to gold

Neither 1 or 2 are correct

M . In the Solow growth model, the economy ends up with a steady-state level of capital;

Regardless of the starting level of capital.

What credit-market policy did the Korean government use to promote exports during the 1970s?

The government used low-interest-rate loans as a form of indirect subsidy to exporters.

prior the asian currency crisis in 1997, the asian banks and fin inst had engaged in borrowing large amount of short term debt denominated in dollars (from international banks) and landing a large amount of longterm loans denominated in local currencies (no local businesses) this behavior had led to insolvency and bank failure. this incident is referred to as...

Sudden Stop :foreign exchange risk

which of the following policies did NOT belong to South Koreas export push policy?

Tax breaks granted to preferred industries.

in 1997 Asian Crisis first struck in _______

Thailand

M Which of the following theory explains a relationship between the level of development and income distribution?

The Kuznets inverted U-shaped curve

Which of the following cases represent an appreciation of the exchange rate value of the U.S. dollar?

The exchange rate goes from 100 yen/$ to 111 yen/$.

M Gini Coefficient

smallest number is most equal

which of the following arises when the knowledge that IMF rescue packages are possible leads to countries being less careful about their international lending practices?

speculative attack: MORAL HAZARD

which is CORRECT about SDR

the SDRis used as an international reserve assets between central banks

If the French demand for American exports rises, then

the dollar should appreciate relative to the euro.

the solow residual is...

the growth rate of total factor productivity

Your father tells you he earned 2.00 hr when he was 16 in 1969, you remember making 10 hr in 2003. given that CPI was 36.7 in 1969 and 184.0 in 2003. how does fathers wage compare to your 2003 wage

the real wages of you and your father were about equal

____ is a policy that encourages global compensation rather than trade protection by supporting domestic firms to produce goods that are competitive in the world market.

trade targeting