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What are some of the opportunity costs countries might face when repaying external debt, particularly when debt was accumulated for the wrong reasons?
Indonesia's total imports last year were $45.13 billion and its exports were $46.67 billion. From this data, calculate Indonesia's debt service ratio.
What effect does a deterioration in a country's terms of trade have on its ability to service its external debt obligations?
What are two or three bad reasons for incurring external debt other than those listed in the chapter?
Why do countries incur external debt? For what purposes can the accumulation of external debt be justified?
What are the potential benefits to a country's balance of payments from having an undervalued exchange rate?
What are the risks to a country's balance of payment from having an over-valued exchange rate?
What situations might cause a currency to depreciate in value? To appreciate in value? To be devalued? To be revalued?
Which term should be used - appreciation or revaluation - in referring to rising exchange rate value when there is a fixed exchange rate?
What new nominal exchange rate will maintain the real exchange rate value of the two currencies constant?
What economic incentives might countries provide to encourage the return of flight capital money and why should they do so?
How countries might achieve it, and why shared growth might be expected to contribute to a more rapid pace of economic development.
What obstacles might be expected to be encountered in overhauling the existing civil service system in countries where corruption seems endemic?
How were the East Asian economies able to avoid unproductive rent-seeking by industrialists. What role do contests play in reducing unproductive rents? Explain.
What other benefits are there to easy export substitution compared to premature difficult ISI as a stage of industrialization to follow after easy ISI?
Do abundant resources necessarily act as a brake on the evolution of the economic structure (this is the resource curse issue)?
What potential problems are there for countries which follow easy ISI with difficult ISI, thus skipping the export substitution stage of transformation?
What is meant by a strategy switch? Why are strategy switches an important component of good policy-making?
Explain what is meant by a foreign exchange shortage. When does a foreign exchange shortage become a foreign exchange crisis?
Explain how the accounting profits of an unsubsidized public enterprise, the output of which creates positive externalities for other firms.
Discuss alternative ways other than tariffs that governments in a less-developed country might encourage and support easy ISI firms to produce in competition.
Carefully explain what is meant by transitional inefficiencies? A few possible sources of transitional inefficiencies were noted in the text.
Carefully explain the economic rationale for imposing an infant industry tariff to protect new producers from import competition.
How does shifting labor from a low-productivity sector to a higher-productivity sector affect an economy's GDP?
Draw a "fuzzy" or "flexible" production function showing how accumulating more human capital can result in different levels of per capita output.