Chapter 15 Self-grading Quizzes

Debt and Development
. Banking originated in ________ before 2000 BCE.

. Odious debt is defined as ________.

. Real interest rate is defined as ________.

. The purpose of the Heavily Indebted Poor Countries (HIPC) Initiative in 1996 was to ________.

. John Perkins, author of Confessions of an Economic Hit Man (2004), claims that he was paid to ________ when working for an international consulting firm with ties to the US National Security Agency.

. The essential difference between the crises of the 1930s and the later crisis of the 1980s was the existence of ________.

. Excessive interest rates are called ________.

. In 1982, ________ became the first developing country to default on its debt obligations, sparking the debt crisis and subsequent structural adjustment programs.

. According to economist Cheryl Payer, foreign loans ________.

. The Jubilee Debt Campaign in 2015 said that it regarded three-quarters of the developing-country debt still owed to the ________ government as "illegitimate."

. ________ was the first creditor country to announce that illegitimate debt must be cancelled.

. Many of the loans in the 1970s had been made to ________.

. ________ occurs when banks and lending agencies are desperate to lend money that they encourage foreign governments to take loans they do not need.

. The past 250 years have seen all the following economic cycles, EXCEPT for: ________.

. The end of World War II brought about major changes in global politics and economics. The following was NOT one of these changes: ________.

. Although the Great Depression affected the United States and Europe _________

. US responded to the 1979 crisis by ____________

. Neoliberalism was introduced ___________

. Neoliberalism was first adopted by Chile followed by ____________

. Neoliberalism calls for ___________

. Rich people's tax evasion and cuts provoked __________

. US President Ronald Reagan sharply raised interest rates _________

. The existence of the Bretton Woods institutions ___________

. Debt service payments has become __________

. The difference between foreign and domestic borrowing ___________

. The Heavily Indebted Poor Countries (HIPC) Initiative sought to ensure that all loans would be successfully repaid.

. Debt incurred from loans that should not have been made is referred to as "odious debt."

. During the Cold War, numerous loans were made in order to prop up and tie client dictators to Western states.

. Overall, the debts of developing countries increased in the 1970s.

. In international law, it is widely accepted that when a government changes, the successor government assumes the laws, contracts, and debts of the previous government.

. In 1945, Britain loaned $3.75 billion from the United States. Britain finished repaying this loan in 1997.

. Increasingly, lenders take due care to see that a loan is reasonable, that the borrower is competent to borrow, and that the borrower can reasonably be expected to repay.

. Usury has only recently become an issue in banking and financing.

. In the growth period, lending can be profitable and promote productive investment and growth.

. One way in which the US shifted the post-1979 economic crisis onto the South was through the raising of interest rates.

. Until 1990, Eastern governments were the biggest lenders to Zaire.

. After the 2008 financial crisis, the international lenders responded to Greece exactly as they had to developing countries three decades earlier.

. Lender-borrower co-responsibilities, as well as odious and illegitimate lending, have not yet been recognized as concepts in international law.

. At the heart of lending and borrowing relationships is power.

. The state-led growth model of lending money in the 1930s Depression, which continued through the 1960s and 1970s, led to improving the conditions of poorer people.

. Economists such as Cheryl Payer (1991) have argued that few countries have successfully developed on the basis of domestic loans.

. Foreign borrowing makes very different repayment demands from those of domestic borrowing since the imposed policies of the Bretton Woods institutions are not very important.

. In international law, it is accepted that when a government changes, the successor government assumes the laws, contracts, and debts of the previous government.

. The seize of Cuba from Spain by the US is not an exception of international debt laws.

. The name and doctrine of odious debt was formalized by Alexander Sack in 1927.

. Illegitimate debt are loans that were properly made and that should be the liability of the borrower.

. The Jubilee Debt Campaign in 2015 said that it regarded three-quarters of the developing-country debt still owed to the UK government as "legitimate."

. Loans that were improperly made and that should be the liability of the lender, not the borrower, are regarded as illegitimate.

. In the early 1970s, Norway became the first creditor country to acknowledge the concept of illegitimate debt.

. The government of Ecuador established an independent Public Debt Audit Commission in 2007, and after that, President Rafael Correa declared the debt "legitimate".

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