the economics of money, banking, and financial markets

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8. 
   

   A sharp depreciation of the domestic currency after a currency crisis leads to ____.
   A) higher inflation
   B) lower import prices
   C) lower interest rates
   D) decrease in the value of foreign currency-denominated liabilities
   Answer: A
   Diff: 1 Type: MC Page Ref: 203 - 204
   Skill: Recall
   Objective List: 9.3 Discuss the most recent financial crisis

   
   


9. 
   

   The key factor leading to the financial crises in Mexico and the East Asian countries was
   ____.
   A) a deterioration in banks' balance sheets because of increasing loan losses
   B) severe fiscal imbalances
   C) a sharp increase in the stock market
   D) a sharp decline in interest rates
   Answer: A
   Diff: 1 Type: MC Page Ref: 204 - 205
   Skill: Recall
   Objective List: 9.3 Discuss the most recent financial crisis

   
   


10. 
    

    In recent years, a number of developing and transition countries have experienced financial
    crises, the most dramatic of which was the ____.
    A) Mexican crisis of 1994- 1995
    B) Mexican crisis of 1988- 1989
    C) Argentina crisis of 1995- 1996
    D) Brazilian crisis of 1996- 1997
    Answer: A
    Diff: 2 Type: MC Page Ref: 204
    Skill: Recall
    Objective List: 9.3 Discuss the most recent financial crisis

    
    


11. 
    

    Factors that led to worsening conditions in Mexico's 1994-1995 financial markets include
    ____.
    A) failure of the Mexican oil monopoly
    B) the ratification of the North American Free Trade Agreement
    C) weak supervision by bank regulators
    D) decline in interest rates
    Answer: C
    Diff: 1 Type: MC Page Ref: 205
    Skill: Applied
    Objective List: 9.3 Discuss the most recent financial crisis