Since Foreign Credit Dries Up in Crises When It Is

question 61

Multiple Choice

Since foreign credit dries up in crises when it is most needed, developing countries can protect themselves from default by

• A) cutting off imports of goods.
• B) allowing the exchange rate to float.
• C) using equity finance only.
• D) accumulating high levels of international reserves.
• E) avoiding the international capital market.

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Definitions:

Labor Costs

The total sum of all wages paid to employees, as well as the costs of employee benefits and payroll taxes incurred by an employer.

Pay Range

A set of possible pay rates defined by a minimum, maximum, and midpoint of pay for employees holding a particular job or a job within a particular pay grade.

Minimum Pay

The lowest legal salary that an employer can pay to an employee.

Maximum Pay

The highest salary or wage rate that an employee can earn in a specific job or position.