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What is the balance of payments

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1. What is the balance of payments? Why must the balance of payments generally add up to zero?

2. Explain how interest rates, exchange rates, inflation, and income change in response to a balance of payments deficit or surplus, both in the case of flexible and fixed exchange rates?

3. Describe the chronology of events leading up to the LDC debt crisis. What were its main causes and what solutions have been proposed to deal with the problem?

4. When does the IMF play a role in lending money to a country? What conditions does it often impose on borrowers? Why?

5. Define and discuss the advantages and disadvantages of foreign aid, foreign debt and foreign investment (direct and portfolio).?

6. What are remittances? What are some of the benefits and disadvantages of remittances for developing countries?

7. What is 'brain drain'?

8. What are developing countries likely to export and import?

9. What is an infant industry?

10. What are free trade areas, customs unions and common markets?

Reference no: EM132413361

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