Beginning in About 1990, Lending to and Investing in Developing

question 53

Multiple Choice

Beginning in about 1990, lending to and investing in developing countries began to increase. One explanation for this is that:

• A)interest rates in the United States began to rise.
• B)the governments in the developing countries began to encourage import-substituting manufacturing.
• C)changes in IMF policies toward exchange rate risk.
• D)deregulation and privatization in the developing countries opened up profitable new investment opportunities.

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Definitions:

Total Cost Curve

A graphical representation showing the total cost of producing different levels of output in the short run or long run.

Quantity

The amount or number of units of a product, good, or service available or demanded in a market.

Fixed Input(s)

Factors of production, such as land or machinery, that cannot be adjusted in the short term.

Short Run

A time period during which at least one input is fixed and cannot be adjusted by a firm.