26. During recessions and economic slowdowns, investment, including foreign investment, typically goes up, as recessions create many profitable investment opportunities. This is what happened in the Latin American and East Asian recessions and even in the global financial crisis of the years 2007-2009 *

(26 out of 40)

2 answers to the question.

True

False

27. Debt crises are contagious: they easily and rapidly spread to other countries, as banks become reluctant to provide credit to countries in similar, difficult financial situations. The Latin American crisis started in Mexico and quickly spread to other countries of Latin America and Africa. The Asian crisis started in Thailand and rapidly affected other countries of the region *

(27 out of 40)

2 answers to the question.

True

False

28. One of the basic reasons why capital moves internationally is the desire to get a higher return on invested funds than is possible in investor's own country. However, moving capital to another country, investors consider not only the rate of return but also security and liquidity of invested funds. Investing abroad is typically riskier than investing at home *

(28 out of 40)

2 answers to the question.

True

False

29. Of diverse types of capital inflows into developing countries, FDI inflows played the largest role before globalization. With the onset of globalization in the 1990s, FDI inflows were replaced by debt and portfolio capital as the largest sources of foreign capital for developing countries *

(29 out of 40)

2 answers to the question.

True

False

30. As regards international capital flows, the largest creditor countries of the world include the United States, Poland and India *

(30 out of 40)

2 answers to the question.

True

False

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