Political Responses to Global Market Forces Practice Test

Based on the passage: Following the 2010 sovereign-debt crisis, Ireland negotiated EU/IMF assistance and implemented spending cuts and tax measures while protecting its low corporate tax rate to sustain investment; Ireland exited its bailout program in 2013 (European Commission, 2013). Spain, facing a banking crisis, pursued labor-market reforms and bank recapitalization with European support, while attempting to soften fiscal tightening to reduce unemployment pressures (OECD, 2014). Compare the approaches of Ireland and Spain to crisis response.

Based on the passage: After the 1997–1998 Asian financial crisis, South Korea accepted an IMF program but combined restructuring with active industrial policy and expanded social insurance; the IMF later noted Korea’s relatively rapid recovery compared with peers (IMF, 2001). Indonesia also accepted IMF assistance, yet political fragmentation and weaker administrative capacity contributed to slower, contested reforms and social unrest (World Bank, 1999). Compare the approaches of South Korea and Indonesia to financial crisis governance.