THE GEORGE WASHINGTON UNIVERSITY School of Business BADM 2201 In!e"n#!ion#l $in#nci#l En%i"on&en! 'T#(e)ho&e E*#& of +#nu#", 22- 201. / 0 Weih! in !he 3l#ss G"#4e5 Ans6e"s Ans6e "s Due on o n Tues4#,Tues4#,- +#nu#", +#n u#", 272 7- 20 1.
(Please submit your answers as hard copies, not in electronic form.) Each typewritten answer should be about one or two paragraphs per question.
1.
Please explain how the role of IMF has evolved since its beinnin in 1!"#. ($%)
&einnin in 1!"#, IMF was 'nown 'n own as a uardian of the &retton ood ood system. owever, IMF had no *ob from 1!+-$ since &retton oods oods system disappear. IMF became influential since beinnin of 1!$ when they wor'ed as a /0 debt crisis manaer, title they had until 1!!. 2fter 1!!", IMF3s role was International financial crisis manaer. owever, with some failures in 2sia 2sia counties, they searched for a new *ob or mission from $%%-$%%. From F rom $%% to now, IMF3s role role is 4conomic 5ecretariat for 6-$% (rich countries). co untries).
$.
Plea Please se expl explai ain n and com compar paree the the trade trade the theor orie iess of 0av 0avid id 7ic 7icar ardo do and and ec' ec'sc sche herr-8h 8hli lin. n. ($%)
0avid 7icardo3s theory explains why oods are bein traded even when countries do not have absolute advantaes. (assumin only one homoeneous homoeneou s input 9 labor). is theory explains financial swaps (interest rate, commodity, and asset). ec'scher-8hlin assumes there are multiple inputs of labor, capital, land, etc. is theory explains how and why country c ountry will export products that utili:e abundant factors and important products that utili:e scarce factors. hen hen the impact of difference of techonoly on productivity in controlled for, his theory ains predictive power. ;he main difference between their theories is that they attributed the rise of comparative advantae to differences in productivity and factor endowments endo wments respectively. respectively.
.
Plea Please se expla explain in and comp compar aree the the rol roles es of the the orld rld &an' &an' and and IF. IF. ($%) ($%)
4ssentially, 4ssentially, both roups roups are in the orld orld &an' 6roup. owever, orld orld &an' (I&70 and I02) ive lon term loan to the overnment only. In contrast, IF ives out lon term loan to private sectors. urrently, IF is rowin much faster since many orani:ations that were previously owned by overnment are now becomin more privately owned.
".
hy was there a movement to create 2sian Monetary Fund in 2sia after the 2sian financial crisis< ($%)
First of all, IMF failed to help out 2sian countries durin financial crisis, mainly because they do not 'now how exactly 2sian economy wor's. IMF did not reali:e that what miht wor' in Mexico miht not wor' in 2sia. In addition, ashinton onsensus was not critical for 2sia. 5imply, 2sia countries believed that they were less represented at IMF.
#.
Please explain the followin terms. (1% points each)= (a) 2utar'y ;he complete absence of trade, also 'nown as closed economy.
(b) MI multilaterali:ation (MIM) ;he 1% members of 2542>?, plus on @on, created MIM to provide financial support throuh a networ' of bilateral currency swap arranements. It draws from a forein exchane reserves pool, total of A1$% billion. ;his was alternative to 2MF.