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BLOCK 1: External Vulnerabilities and Imbalances

100

Which country has the largest deficit in the current account balance (in % of the GDP) ?

• China
• Germany
• The United States
• European Union

The United States

200

When the cyclically-adjusted CA is higher than the cyclically adjusted CA norm, it means that at the long run equilibrium, the exchange rate will :

• Remain identical
• Appreciate
• Depreciate
• Impossible to say

Appreciate

300

In the EBA, a positive and a normative analyses are conducted. The desired policy levels belong to

• the positive one
• the normative one
• both
• a complementary analysis

the normative one

400

Consider an economy with a fitted current account balance of -2% (in percentage of GDP), policy gaps of (-1%), and a REER elasticity to current account of -0.1. If the actual current account is -2%, then ................................................  is needed : 

• appreciation of 10%.
• appreciation of 20%.
• depreciation of 10%.
• depreciation of 20%. 

depreciation of 10%. 

Block 2: Fiscal Vulnerabilities

100

What would happen to the ratio of public debt to GDP over time if the real interest rate equals 4%, the real GDP growth rate equals 3% and the primary fiscal balance is in a deficit of 1% of GDP?

• It will increase
• It will remain stable
• It will decrease
• It will exhibit high volatility

It will increase

200

Which of the following statements is true regarding the IMF’s risk-based approach to assessing debt sustainability?

• Countries that exhibit higher vulnerabilities require more detailed debt sustainability analysis
• Only countries above a certain level of public debt-to-GDP (50/60 for EMs/AEs) or public gross financing needs to GDP (10/15% for EMs/AEs) undergo more detailed debt sustainability assessment
• An equally thorough assessment of risks is produced for all MACs
• All of the above

Countries that exhibit higher vulnerabilities require more detailed debt sustainability analysis

300

Which of the following developments suggests higher likelihood of fiscal distress for a hypothetical advanced economy?

• Tightening sovereign CDS spreads
• Increasing maturity of debt
• Large share of public debt held by residents
• None of the above

None of the above

400

Which of the following statements is true about the term “stochastic simulation”? Select all that apply.

• Do not know the probability of their occurrence
• May be seemingly plausible but in fact unlikely
• Automatically captures underlying correlations among variables
• None of the above

Automatically captures underlying correlations among variables

Block 3: Financial Vulnerabilities

100

The options below represent examples of financial vulnerabilities, except one which is…

• Excessive maturity, liquidity, and currency mismatches
• Weak profitability
• Exchange rate devaluation
• High credit concentration

Exchange rate devaluation

200

Endogenous risk is generated and amplified within the financial system through

• the interactions of financial market participants
• synchronized asset price feedback
• a and b
• none of the above

a and b

300

The following bank financial ratios indicate:

	Tier 1 capital ratio	NPL ratio	Return on asset
Bank 1	7.8	5.3	0.5
Bank 2	12.3	1.1	2.0
Bank 3	9.3	2.1	0.1
Bank 4	10.9	5	3.0

• All banks are financially sound
• Banks 2 and 3 would withstand well a severe recession that leads to a sharp deterioration of asset quality and sharp drop in revenues
• Bank 1 is likely to be severely affected by a sharp increase in interest rates
• The vulnerabilities in the banking sector are very limited.

Bank 1 is likely to be severely affected by a sharp increase in interest rates

400

What does the optimal threshold of a variable used to signal financial distress coded as a binary variable depend on?

• The Logit model used to predict distress
• The sum of the percentages of missed crises and false alarms
• The signal-to-noise ratio
• The utility function of the policymaker

The utility function of the policymaker