____________________trade is when a lender gives up resources (money) today in order to get more resources (amount

loaned plus interest) in the future.

a. Intemperate

b. Intertemporal

c. International

d. Intentional

If a bank borrows money in a foreign currency and uses that money to make loans in its domestic currency, in addition to the financial risk involved, the bank also takes a(n) ____________________ risk.

a. monetary

b. fiscal

c. exchange rate

d. transaction

Which of the following contributed to the Asian crisis?

a. The Hong Kong dollar was allowed to depreciate.

b. The local borrowers in the Asian countries scrambled to sell local currency to establish hedges against exchange rate risks.

c. The strong capital inflows from the industrialized countries mainly provided financing for large fiscal deficits in the Southeast Asian countries.

d. The currencies of most of the Asian countries were substantially undervalued.

Which of the following are things that can go wrong and lead to international financial crises?

a. International shocks such as rising foreign interest rates

b. Exchange rate risks because of mismatched assets and liabilities

c. Fickle short-term lending by foreign commercial banks

d. International shocks, exchange rate risks, and excessive short-term borrowing

In shifting from no international lending to barrier-free, well-behaved international lending, lender countries would ____________________ and borrower countries would ____________________.

a. lose; lose

b. lose; gain

c. gain; lose

d. gain; gain

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