Question

1. Actions by U.S. President Richard Nixon were the primary cause of the end of the Bretton Woods system.

Select one:

a. TRUE

b. FALSE

2. Which one of the following countries is a "PIIGS" nation?

Select one:

a. Poland

b. Indonesia

c. Greece

d. Singapore

3. Which of the following is not a potential problem faced by developing nations that borrow from abroad?

Select one:

a. Interest payments on the debt obligations are transfers from domestic residents to foreign residents.

b. Funds obtained from foreign borrowing are often used to finance acquisitions of capital resources.

c. Foreign borrowers may place conditions on loans that effectively transfer some control over resource-allocation decisions away from domestic residents.

d. Foreign shorter-term investment and loans can be highly volatile.

Answer 1

1. Actions by U.S. President Richard Nixon were the primary cause of the end of the Bretton Woods system. This is True.

2. c. Greece is one of the PIIGS nation. PIIGS lists five of the most economically weak eurozone nations during the European debt crisis that started in 2008-2009. The other countries are Portugal, Italy, Ireland and Spain.

3. b. Funds obtained from foreign borrowing are often used to finance acquisitions of capital resources. This is not a potential problem faced by developing nations that borrow from abroad. Rest all options depict the various issues related to borrowing from abroad.