Deck 17:Cases

Question 1

Go again to the International Monetary Fund (IMF) Web site (http://www.imfsite.org) and click "Conditionality" to learn more about the history, role, operation, and effectiveness of IMF conditionality (in the IMF view).

Answer 1

not answer

Question 2

Use the World Bank Web site (http://www.worldbank. org) to look up debt information on a developing country of your choice. Look for the debt service ratio, which is the ratio between debt service (annual repayment of debt plus interest) and export earnings and which is written as Total Debt Service/Exports. This ratio is the best indicator of the debt burden of an individual country.

Answer 2

The debt service ratio is the ratio between debt service and the export earnings. This is written as Total debt service /Exports. This ratio is the best indicator of debt burden of an individual country.
Here is the debt service ratio of some developing countries for the year 2011:

Question 3

Go to the home page of the World Bank at http://www. worldbank.org to discover the wealth of information on worldwide economic and social indicators, including information on savings rates, standards of living, and international debt. To obtain data quickly, click a country of your choice to obtain the most recently available data.

Answer 3

The World Bank provides the information of various countries on economic and social indicators, including savings rate, standard of living and international debt. Here is the information on Kenya.
Kenya is a low-income country with GNI $33.62 billion in 2011. The gross savings of the country was 13.5% of GNI. The current value of external debt was $7,052,222,760.

Question 4

What type of safety net is necessary for residents of formerly socialist and developing countries as they move toward market economies?

Question 5

What do you think of the normalizing of relations between the United States, as announced by President Obama in late 2014? Do you think they will be effective in improving living conditions for people in Cuba? Do you think they will assist in improving the political climate in Cuba?

Question 6

Do you believe that the global movement toward freer markets will continue well into the twenty-first century, or will it reverse itself? Why?

Question 7

Are you an economic liberal or conservative? What is your view of government social programs, taxes, and regulation of business?

Question 8

Consider the U.S. supply-side policies and proposals of the 2000s, such as reductions in taxes and environmental regulations. Do you expect these policies to achieve efficiency and economic growth? Do you expect the benefits of these policies to trickle down to all?

Question 9

What do you think about some of the specific conservative tax policies and proposals, such as replacing the personal income tax with a consumption tax and reducing the capital gains and dividends tax? Do you think these would be effective in creating economic growth? How do you feel about the effect they would have on U.S. income distribution?

Question 10

How might the U.S. government encourage greater research and development? How would R D benefit the economy?

Question 11

Suppose that the government of a formerly socialist country decontrols prices and permits them to rise to market levels. How can the government assist lowincome consumers who might be unable to afford higher food and other prices?

Question 12

Assume that the process of privatization continues successfully in Russia. Would all the problems of Russian industry by solved? What other policies may be necessary?

Question 13

Use the Central Intelligence Agency (CIA) World Factbook at http://www.cia.gov/cia/publications/factbook to look up the current economic situation in any one of the Eastern industrialized countries. Has GDP been increasing or decreasing? How high is the inflation rate? What are some of the standards of living (life expectancy, infant mortality rate, and so on)? How do these compare with other countries in the Eastern industrialized world?

Question 14

How have international conditions outside the control of developing countries exacerbated the problem of international debt? Do you believe it is right for the IMF to stipulate conditions when providing financial assistance to debt-ridden developing countries?

Question 15

Go to the International Monetary Fund (IMF) Web site at http://www.imfsite.org. It provides links to countless statistics, reports, and other global information, including the transformation of countries to capitalism.