Balance of Payments, Aid and Foreign Investment

A. an economy more open to foreign trade and investment faces a more inelastic demand for unskilled workers
B. employers and consumers can more readily replace domestic workers with foreign workers by investing abroad or buying imports
C. globalization increases job insecurity
D. financial liberalization in LDCs leads to collapse of the economy

A. During the 1980s OECD countries contributed four fifths of the world’s bilateral official development assistance to LDCs
B. In the early 1990s the OECD contributed 98 percent of all aid
C. The OECD aid increased from $6.9 billion in 1970 to $8.9 billion in 2001
D. In 2001, only Denmark Norway, Sweden, the Netherlands, and Luxembourg exceeded the aid target for LDCs

I- are understaffed politically muddled and administratively complex
II- are biased toward Asia
III- go primarily to less developed countries in Africa
IV- focus on loans and the grant element of aid is low

I- developments grants
II- loans with at least 25 percent grant element
III- military assistance
IV- technical cooperation

A. own domestic savings and by inflows of capital from abroad
B. stock market and fiscal policy
C. savings from abroad and financial outflow
D. savings and financial liberalization

A. the capital accounts
B. the international balance of payments statements
C. the long-term current account
D. the trade accounts

I- the skill limit
II- the savings gap
III- the fiscal gap
IV- the foreign exchange gap

A. negative effect on economic growth during the simultaneous five-year period but has a significantly positive effect on growth in the subsequent five years
B. no effect on economic growth during the simultaneous five-year period but has a significantly negative effect on growth in the subsequent five years
C. a significantly positive effect on growth in the subsequent five years
D. an exponentially negative effect on growth ten years

A. technical assistance to stock market and financial market problems
B. loans for post-World War II reconstruction
C. short-term credit for international balance of payments deficits
D. bonds denominated in U.S dollars as a loan to LDCs

A. investors are directly involved in managing the operations
B. as in direct investment investors export goods and services abroad
C. investors transfer the technology to local investors
D. investors have no control over operations