A. and the dangers of free capital movements for LDCs with poorly developed financial institutions
B. and the dangers of a trade deficit
C. and the external openness of income growth among the poorest 40 percent of LDCs
D. and MNC domination and its effects on income distribution
Balance of Payments, Aid and Foreign Investment
The balance on current account ?
I- equals the absolute value of the balance on capital account
II- is financed by savings
III- is net grants minus remittances
IV- includes goods services and unilateral transfers
Bilateral aid ?
A. is technical aid given by IMF
B. is given directly by one country to another
C. is aid with repayment in inconvertible currency
D. is a loan at bankers’ standards
MNCs can help the developing country to ?
I- Finance a savings gap or balance of payments deficit
II- Obtain foreign technology by adapting existing processes
III- Generate appropriate technology by adapting existing processes
IV- Employ domestic labor, especially in skilled jobs
Some economists and third-world policy makers criticize MNCs arguing that they have a negative effect on the developing country because they ?
I- increasing the LDC’s technological dependence on foreign sources resulting in less technological innovation by local workers
II- Hamper local entrepreneurship and investment in infant industries
III- increase unemployment rates from unsuitable technology
IV- Restrict subsidiary exports when they undercut the market of the parent company
Carmen Reinhart and Kenneth Rogoff explain the paradox of capital flows from poor to rich countries by ?
A. the brain drains from LDCs to DCs
B. the price role of political and credit-market risk in many LDCs
C. the law of increasing returns that implies that the marginal productivity of capital is higher in LDCs
D. the fat that the DC capital market is perfectly competitive
The U.S real food aid, as well as food reserves dropped from the 1960s to the 1980s partly because ?
A. the transportation and storage cost increased tremendously
B. proponents of basic-needs attainment opposed food-aid
C. U.S farm interests wanted to reduce surplus grain stocks
D. agricultural production suffered excessively due to weather changes
For Harvard’s Dani Rodrik Globalization involves ?
A. decreasing autonomy of the nation-state involves
B. the increasing international integration of markets for goods services and capital
C. changes of a traditional culture of a country to a western culture
D. giving aid to poor countries to improve their economy politics and social status
U.S total official development assistance to developing countries is ?
A. lowest among the OECD countries
B. higher currently than it was in the 1960s and 1970s
C. is equivalent to Holland’s aid
D. None of the above statements is true