Stabilization, Adjustment, Reform & Privatization Mcqs - Set 1

1)   A critic of “Shock therapy” to transition economies. Vladamir Popov, contends that shock therapists put a heavy emphasis on ?

a. introducing the reform package at once to ensure that it became too late and costly to reverse the reforms
b. agricultural reform rather than industrial reforms to overcome food insecurity
c. the creation of a small-scale private sector ans small independent banks
d. attempts to gradually remake institutions
Answer  Explanation 

ANSWER: introducing the reform package at once to ensure that it became too late and costly to reverse the reforms

Explanation:
No explanation is available for this question!


2)   Privatization refers to a range of policies including ?
I. changing part of a public enterpris’s ownership to the private sector
II. Liberalization of entry into activities previously restricted to the public sector
III. two infant industries merging into a monopoly
IV. franchising or contracting public services or leasing public assets to the Private sector


a. III only
b. IV only
c. I, II and IV only
d. None of these
Answer  Explanation 

ANSWER: I, II and IV only

Explanation:
No explanation is available for this question!


3)   State-owned enterprises (SOEs) are also called ?

a. centralized firms
b. government oligopolies
c. market economies
d. public enterprises
Answer  Explanation 

ANSWER: public enterprises

Explanation:
No explanation is available for this question!


4)   The industrial concentration ratio is the proportion of an industry’s output ?

a. produced by the three largest firms in the industry
b. produced in cement, machine tools and steel industries
c. and labor intensities relative to labor productivity
d. as a percentage of production and marketing
Answer  Explanation 

ANSWER: produced by the three largest firms in the industry

Explanation:
No explanation is available for this question!


5)   In 1979-80 China first created _____ for foreigners to set up enterprises hire labor and import duty-free goods for processing and re-exporting ?

a. special economic zones
b. liberalized trade monopoly zones
c. Economic Union zones
d. Communist free trade areas
Answer  Explanation 

ANSWER: special economic zones

Explanation:
No explanation is available for this question!


6)   Structural economists from the United Nations Economic Commission for Latin America (ECLA) emphasized ?

a. contractionary monetary and fiscal policies
b. currency devaluation
c. long-run institutional and structural economic change
d. short term-adjustment with a human face
Answer  Explanation 

ANSWER: long-run institutional and structural economic change

Explanation:
No explanation is available for this question!


7)   Countries facing a persistent external deficit can ?
I. borrow overseas
II. increase trade restrictions and exchange controls
III. undertake expansionary monetary and fiscal policies
IV. Undertake expenditure-reducing policies


a. I and II only
b. III and IV only
c. I, II and III only
d. I, II and IV only
Answer  Explanation 

ANSWER: I, II and IV only

Explanation:
No explanation is available for this question!


8)   S = Savings, I = domestic investment, X = exports of goods and services, and M = imports of goods and services Which of the following is true ?

a. S – I = X = M
b. S + I = X + M
c. S = I – (X+M)
d. S-I = X/M
Answer  Explanation 

ANSWER: S – I = X = M

Explanation:
No explanation is available for this question!


9)   Countries with chronic balance of payments deficits eventually need to borrow abroad often from the ________ as the lender of last resort?

a. U.S
b. OECD
c. IMF
d. OPEC
Answer  Explanation 

ANSWER: IMF

Explanation:
No explanation is available for this question!


10)   Pathologies endemic to the Soviet bureaucracy included secrecy formalism cumbersome procedures rigidity and the tendency to concentrate on control rather than performance The party controlled The state by using the ____ the power to recommend and approve managers in administration and enterprises, of appointments and promotions to control access to government positions ?

a. Gosplan
b. Gosagroprom
c. nomenklatura system
d. Parastatals
Answer  Explanation 

ANSWER: nomenklatura system

Explanation:
No explanation is available for this question!


11)   A development bank based in London, which loans funds to governments of Eastern Europe and the former Soviet Union is the ?

a. Transitional Monetary Fund
b. World Bank
c. European Bank for Reconstruction and Development
d. OECD
Answer  Explanation 

ANSWER: European Bank for Reconstruction and Development

Explanation:
No explanation is available for this question!


12)   Which of the following statement is NOT true about state owned enterprises (SOEs) ?

a. SOEs perform better with competition
b. Successful performing SOEs in Japan, Singapore and Sweden have greater managerial autonomy and accountability than other SOEs
c. SOEs in South Korea and Sweden generally achieve inferior economic results to those in Ghana
d. Financial autonomy is a major factor contributing to SOEs managerial effectiveness
Answer  Explanation 

ANSWER: SOEs in South Korea and Sweden generally achieve inferior economic results to those in Ghana

Explanation:
No explanation is available for this question!


13)   Which of the following is not a quasi-public good ?

a. national defense
b. an automobile
c. libraries
d. fire protection
Answer  Explanation 

ANSWER: an automobile

Explanation:
No explanation is available for this question!


14)   Before the 1978 reforms China had a(n) ?

a. agricultural bank only
b. urban credit cooperatives
c. mono bank system
d. housing savings banks
Answer  Explanation 

ANSWER: mono bank system

Explanation:
No explanation is available for this question!


15)   Countries such as ________ that failed to adjust to a persistent external disequilibrium were more vulnerable to poverty displacement and even war ?

a. Japan and Korea
b. Brazil and Argentina
c. Algeria and Yugoslavia
d. Singapore and Malaysia
Answer  Explanation 

ANSWER: Algeria and Yugoslavia

Explanation:
No explanation is available for this question!


16)   When the world Bank or IMF requires improved external balance in the short run the agency may condition its loan on expenditure switching that is ?

a. switching spending from domestic to foreign sources
b. devaluing local currencies
c. increase trade restrictions by imposing quota
d. increase government spending
Answer  Explanation 

ANSWER: devaluing local currencies

Explanation:
No explanation is available for this question!


17)   Internal balance refers to ?

a. full employment and price stability
b. exports minus imports
c. monetary policy offsetting fiscal policy
d. exports equal to imports
Answer  Explanation 

ANSWER: full employment and price stability

Explanation:
No explanation is available for this question!


18)   According to the Brandt report the IMF’s insistence on drastic measures in short time periods ?
I- contributes to low-income countries recovery quickly
II- reduces basis-needs attainment
III- may lead to IMF riots
IV- may lead to the downfall of governments


a. I only
b. II only
c. I and II only
d. I, III and IV only
Answer  Explanation 

ANSWER: I, III and IV only

Explanation:
No explanation is available for this question!


19)   Which of the following may constitute the International Monetary Fund’s conditionality for borrowing?
I. government reducing budget deficts
II. limiting credit creation and liberalizing trade
III. achieving market-clearing price
IV. restraining public sector employment and wage rates


a. I and II only
b. III and IV only
c. I, II , III and IV
d. None of these
Answer  Explanation 

ANSWER: I, II , III and IV

Explanation:
No explanation is available for this question!