the external debt and financial crises Mcqs
1. Which of the following country was not a major LDC debtor in 2001 ?
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A. Argentina

B. Malaysia

C. Thailand

D. Brazil

2. Which of the following is will NOT reduce capital flight from source countries ?
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A. more efficient state enterprises

B. dependable positive real interest rates

C. market liberalization

D. higher taxes on capital gains
3. Shortly after 1979 World Bank introduced loans that emphasized reforms in trade, agriculture industry public enterprise financial energy education or other sectors and were know as ?
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A. external leverage loans

B. sectoral adjustment loans

C. Structural adjustment loans

D. internal adjustment loans

4. Which of the following statement is Not true ?
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A. Many large LDC debtors borrowed heavily because of their excellent international credit ratings

B. The debt-burden of sub Saharan African countries may be as heavy as for middle income countries

C. Middle income countries account for almost four-fifths of the total outstanding debt of all LDCs

D. The ratio of debt service to GNP is very good indicator of the debt burden
5. The debt-service ratio is the______________?
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A. interest and principle payments divided by exports of goods and services

B. default and reschedule debt minus annual export revenues that must be devoted to paying interest

C. ratio of debt net of portfolio investment financing and foreign direct investment

D. long-term debt divided by GDP of a country in a given year

6. The policy cartel on debt reduction refers to the_______________?
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A. None of the above

B. screening of debtors based on their regional location

C. World Bank requiring LDCs seconded by a DC to get loan reduction

D. loan denial to crisis-stricken highly indebted countries

7. Initial conditions in the year before the crisis in Thailand Indonesia Malaysia the Philippines and Korea in 1997 indicate that ?
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A. Nonperforming bank loan ratios were high

B. . current account deficits were high

C. credit growth was fast

D. capital inflows/GDP were very low

8. Which of the following country did not experience large capital flights from 1976 to 1984 ?
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A. Argentina

B. Mexico

C. Canada

D. Venezuela

9. Highly-indebted poor countries (HIPCs) include________________?
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A. Benin

B. Bolivia

C. Tanzania

D. #NAME?

10. In 1990, during the Persian Gulf War, the U.S government extended generous terms to two middle-income countries by canceling or reducing their debt The two countries were ?
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A. Egypt and Poland

B. Saudi Arabia and Jordan

C. Pakistan and Afghanistan

D. Iraq and Iran

11. Shortly after 1979 World Bank introduced loans that emphasized reforms in trade, agriculture industry public enterprise financial energy education or other sectors and were known as ?
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A. Structural adjustment loans

B. internal adjustment loans

C. external leverage loans

D. sectoral adjustment loans
12. The Baker plan (1985) stressed _______ and the Brady Plan (1989) emphasized _______ respectively?
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A. new loans from multilateral agencies and surplus countries; debt reduction or write-downs

B. IMF decentralization; World Bank dissolution

C. structural adjustment loans for LDCs experiencing unanticipated external shocks; renewed emphases on macroeconomic stabilization programs

D. debt relief for at leas three-fourths of the eligible HIPCs; shorter requirements for adjustment programs

13. Which of the following country did Not suffer from increased poverty from debt and financial crises in the 1990s ?
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A. Russia (1998)

B. Brazil (1998)

C. Singapore (1994)

D. Mexico (1994)

14. Which of the following factors potentially increased the vulnerability to the 1997 Asian financial and currency crisis ?
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A. Symmetric informational in financial market

B. technological transfer from DCs

C. massive reverse outflows of capital

D. trade account surplus

15. Mosley Harrigan and Toye refer to the IMF and World Bank as________________?
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A. excessively committed to writing down LDC debt

B. a managed duopoly of policy advice

C. a U.S monoply

D. the initiator of HIPCs debt forgiveness

16. A countrys total external debt (EDT) includes ?
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A. short term debt with a maturity of one year or less

B. IV public official development assistance

C. long-term debt with a maturity of more than one year

D. . repurchase obligations to the IMF

17. Net transfers are______________?
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A. net international resource flows minus net international interest payments and profit remittances

B. international resource outflows minus international balance of payments and profit remittances

C. foreign direct investment inflow minus investment loans and grants from overseas

D. investment loans, and grants from overseas minus international resource outflows

18. Which of the following is Not true about external debt ?
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A. International lenders required LDC governments to guarantee private debt

B. When debts are denominated in U.S dollars their appreciation during the 1990s increased the cost of servicing such debts

C. External debt accumulates with international balance on goods services and income deficcits

D. In the 19901s LDCs relied increasingly on aid from DCs
19. Fundamentalists want the IMF to lend to crisis-stricken countries on condition that they undertake fundamental structural reforms in banking Joseph Stiglitz however thinks it is______________?
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A. impractical for the IMF to loan short term as reforms can only be effective in the middle to long run

B. crucial that the IMF intervene in the reform of fiscal policy of the country and not the monetary policy

C. unrealistic for IMF to intervene in the financial markets of poor countries during the crisis

D. None of the statements above is correct