33 As a country begins to liberalize its capital account, what would you expect to happen to the difference between the interest rates for similar assets in this country and another country with open capital markets?Aget smallerBstay the same(c) exponential divergenceDIt depends on the existing exchange rate.E)get larger34 Which statement is NOT true regarding emerging markets?A) Emerging market financial institutions have generally proven to be weaker than those in industrialized countriesB)Emerging market financial institutions contributed to the financial crisis of 1997-1999CCountries with emerging markets have been unable to liberalize their financial systems to allow private trade with foreignersDCountries with emerging markets include Brazil, Mexico, and Thailand.(E) Emerging markets are the capital markets of poorer, developing countries that have liberalized their financial system to allow private asset trade with foreigners35 Which of the following is TRUE about exchange rates?AThey are more volatile than several underlying factors that move them such as money supplies and fiscal variables(BThey should not be volatile because they will determine the economic climateThey are generally more volatile than stock pricesDThey should be volatile becausecorrect price signals they adjust quickly in response to economic news, but they are generally less volatile than stock prices(EThey never overreact to economic news36 Complete the following sentence: Over the period 1960 to 2014, the United States economy grew at roughlyA1%B3.5%3%(D4%(E) 2.1%

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As a country begins to liberalize its capital account, what would you expect to happen to the difference between the interest rates for similar assets in this country and another country with open capital markets? get smaller (B stay the same exponential divergence It depends on the existing exchange rate. E get larger