SOLVED

1) Financial deepening is synonymous with ________. A) issuing equities. B) financial development. C) borrowing additional funds from world capital markets. D) holding a well diversified portfolio. 2) Evidence suggests that financial deepening is of greatest benefit to ________. A) industries that are highly dependent on external sources of funds B) family-owned enterprises C) established firms, rather than new firms D) child workers 3) An important consequence of financial deepening is ________. A) an increase in the number of new firms B) a sharp increase in levels of saving & investment C) higher profit rates D) an expansion of bank loans relative to other funding sources 4) Economic growth in China ________. A) would have been impossible in the absence of its impressive record of financial development. B) occurred despite limited domestic financial development. C) can continue indefinitely without additional financial development. D) has occurred despite a relatively low domestic saving rate. 5) Per capita income in China is approximately ________% of the U.S. level. A) 12 B) 80 C) 40 D) 5 6) Over the past two decades, the saving rate in China has been approximately ________%. A) 12 B) 80 C) 40 D) 5 7) China’s recent economic performance is most similar to the experience of ________. A) the United States in the 1890s B) Japan in the 1960s & 1970s C) Cuba in the 1990s D) the Soviet Union in the 1950s & 1960s 8) The single most important contributor to China’s economic growth has been ________. A) government-directed credit to key economic sectors B) strong demand for China’s exports C) rapid improvements in worker productivity D) a substantial increase in the utilization of labor and capital inputs 9) ________ is among the ingredients of “a first-rate financial system.” A) Government-directed credit to key economic sectors B) Greater efficiency of state-owned banks C) Legal reform to strengthen financial contracts D) Saving rates of 20% or more 10) What are the benefits of bankruptcy laws that enable lenders to seize the assets of firms that default on loan contracts? 11) How might financial deepening contribute to poverty reduction?