Special Situations in Emerging Markets and Developing Economies, Such as Volatile

question 130

Multiple Choice

Special situations in emerging markets and developing economies, such as volatile output and an export dependent economy, usually mean:

• A) the prudent level of reserves is much higher than for higher-income nations.
• B) there is no way they are able to maintain an exchange rate peg.
• C) pegging exchange rates is even more important.
• D) pegging exchange rates is much easier because the economies are smaller.

---

Definitions:

Reasoning

The process of forming conclusions, judgments, or inferences from facts or premises.

Frontal Lobes

The part of the brain located at the front of each cerebral hemisphere, responsible for decision-making, problem-solving, control of purposeful behaviors, consciousness, and emotions.

Dopamine Receptors

Proteins located on the surface of certain cells in the brain that bind dopamine and are involved in transmitting the dopamine signal.

Amygdala

A small, almond-shaped cluster of nuclei located deep within the temporal lobes of the brain, involved in processing emotions such as fear, anger, and pleasure.