Exam 38: Macro Policy in Developing Countries

The central banks of many developing countries choose to pursue policies that generate high levels of inflation, because the benefits of doing so seem to exceed the costs.

If a currency is convertible for the current account, then it is fully convertible.

In developing countries, the government's revenues are:

Some argue that developing countries that lack a well-educated, general population tend to have:

The economic problems of developing countries may seem impossible to solve through the application of standard monetary and fiscal policy;but they sometimes can be solved by "regime change".How is regime change different from a policy change? Give an example where regime change was successful in turning around the economy of a developing country.

If the government of a developing country reduces its budget deficit, then the inflation tax:

The purpose of limited capital account convertibility is to:

What are some of the institutional barriers facing developing countries in terms of implementing fiscal policy?

The macroeconomic policy choices of developing countries like Zambia and Namibia:

In countries such as El Salvador or Ghana, tax revenue is extremely limited due to the lack of an adequate tax-collection agency. These countries most likely will issue bonds and sell them to the central bank in order to cover government expenditures. Thus, the lack of:

Economic takeoff:

Developed and developing countries have very different normative goals.What are these goals?

An effect of the inflation tax is that it redistributes income from the:

What is a dual economy?

Developing economies are generally characterized by a dual economy, which means that they have:

The IMF often requires countries that borrow from it to introduce policies that privatize government-owned industries such as telecommunications and power generation. This is an example of:

A monetized debt prompts:

Developing countries would benefit the most from a given increase in their education budgets if they spent more:

Ecuador's GDP per capita in 2017, based on market exchange rates, was $5,600. In that same year, Ecuador's GDP per capita based on purchasing power parity was $11,100. The difference between these two measures of GDP per capita is most likely explained by:

According to Hernando De Soto, a Peruvian economist, it takes 168 steps in order to have a house registered in the Philippines. In Haiti, it takes 111 visits to officials to formalize a business. However, "if you make the right payments, this tedious process may disappear." The textbook calls this situation an example of: