Question

1. When it comes to achieving economic growth, which of the following aRE common policies in high-income countries?

Select the correct answer below:

a. fiscal policies focused on investment

b. policies that support a market-oriented economic climate

c. monetary policies aimed to keep inflation low

d. all of the above

2. Which of the following are the two categories of financial investments that cross international boundaries and require exchanging currency?

Select all that apply: 2 correct answers

• exchange rate movements

• foreign direct investment (FDI)
• hedges
• portfolio investment

3. Which of the following is a reason why countries import goods from other countries?

Select the correct answer below:

a. to steal jobs from other countries

b. to increase the domestic standard of living as people enjoy lower priced imported goods and a higher variety

c. to increase domestic jobs

d. to influence other countries policies

4. Which of the following is true about a country with a current account surplus?

Select the correct answer below:

a. domestic investors are sending their funds abroad

b. the country is experiencing a net inflow of financial capital

c. the country is a net lender to the rest of the world

d. none of the above

5. A common obstacle in achieving domestic economic growth in low-income countries is...

Select the correct answer below:

a. the lack of political stability

b. the lack the economic and legal stability

c. the lack of market-oriented institutions

d. all of the above

Answer 1

1. Option D

Explanation: All the given options are responsible for high level of economic growth in high income countries.

2. Right options:

• Foreign Direct Investment (FDI)
• Portfolio Investment

Explanation: These two investments require movement of currency across borders.

3. Option B

Explanation: Import helps in getting access to cheaper goods and increase domestic consumption.

4. Option D

Explanation: Current account surplus means the value of exports is higher than the value of imports.

5. Option D

Explanation: All the given factors lead to economic growth in low income countries.