10. Which of the following statements is an accurate characterization of the relationship between financial crises and globalization?

&a. A country with a globalized economy is more vulnerable to financial crises than a country with a closed economy.

&b.The greater the amount of short-term money invested in a country, the greater the potential for a crisis if investors lose confidence in the country.

&c. An open economy will be punished for bad economic policy as foreign investors move money out of the country.

&d.A globalized country with sound economic policies will be rewarded with large flows of savings from the rest of the world.

&e. All these statements are accurate characteriza tions of the relationship between financial crises and globalization.

Practice Questions and Problems