Pol 235 Final

"What role does the ""diminishing marginal returns to capital"" perform in the Solow model?" http://www.youtube.com/watch?v=EOsmFF4NGek

"""Diminishing marginal returns to capital"" is a brake on economic growth in developed, but not developing, countries."

In what way is population growth related to poverty cycles?

"The quantity of infrastructure, rather than quantity, increases to meet population demands."

The academic ______________ is the father of Modern World System's theory. A) Immanuel Wallerstein B) Raul Prebisch C) Immanuel Kang D) Karl Marx

A) Immanuel Wallerstein

In a famous passage from the Wealth of Nations, Adam Smith stated that the butcher "by pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the _______." A) Public good B) Working class C) Rich D) Public Bad

A) Public Good

The basic idea behind structuralism is that A) The international system is one of exploitation B) The proletariat exploits the core C) the state exploits the market D) power is necessary for wealth

A) The international system is one of exploitation

Keynes played a pivotal part in extending the institutional liberal political economy perspective to the __________ level. A) international B) consumer C) anti-trust D) game theory

A) international

According to the etext chapter2, perspectives are useful tools in helping to understand A) the complex and changing issues in IPE B) Inner workings of supply and demand economic models C) the law of gravity D) complex statistical problems

A) the complex and changing issues in IPE

Based on the video in the module on economic nationalism, Henry Clay's ideas for promoting and protecting American Industries was referred to as the ______________

American System

In the liberal point of view, a hegemon is A) a strong nation that uses its wealth and power to set the rules of the IPE, so as to gain more wealth and power for itself B) a rich and powerful state that supplies the international public goods necessary for a peaceful and prosperous IPE C) a free rider D) a strong capitalist nation that uses its power to exploit less developed countries

B) a rich and powerful state that supplies the international public goods necessary for a peaceful and prosperous IPE

Lenin believed that capitalism was able to postpone its crisis by: A) government policy that increased the rate of profit B) exploiting less developed countries through imperialism C) exploiting rich countries through imperialism D) Keynesian economic policies that reduce the chance of another Great Depression

B) exploiting less developed countries through imperialism

Adam Smith favored laissez-faire policies, where individuals would achieve social benefit guided by the invisible hand. The invisible hand stands for A) government regulation B) individual self interests and choices C) hegemonic stability D) hidden income taxes

B) individual self interests and choices

Which of the following ideas about free and open market is NOT associated with classic liberalism? A) open markets results in a positive-sum benefit for all B) open markets results in zero-sum benefits for all C) competition is good D) open markets lead to greater wealth

B) open markets results in zero-sum benefits for all

How does neo-imperialism differ from classical imperialism? A) international organizations create laws and policies for member nations B) states no longer need to occupy other countries in order to exploit them C) after a war, nations install leaders of their choosing in the conquered country D) security interest replace economic motives for going abroad

B) states no longer need to occupy other countries in order to exploit them

Unlike dependency theory, world-systems theory A) uses the concept of the semi-periphery B) views development as possible for LDCs, even if it is dependent development C) is concerned with both relations of exchange and relations of production D) underestimates the importance of domestic factors in development

B) views development as possible for LDCs, even if it is dependent development

In light of market failures, J.S. Mill believed that the ________________ had a role to play in the economy. A) military B) mercantilists C) state D) Hamilton society

C) state

The Modern World System theory looks at capitalism as: A) the conflict between the proletariate and the bourgeoisie B) the exploitation of the North by the South C) the capitalistic interactions of core, semi-periphery, and periphery D) the fundamental tension between state and market

C) the capitalistic interactions of core, semi-periphery, and periphery

Quite obviously, perspectives in IPE are NOT useful tools in helping us understand A) intersections between economics and power B) how wealth is distributed C) the law of gravity D) the balance of economic power in the international system

C) the law of gravity

The country that has seen the sharpest drop in poverty at or even below $1.25 day has been __________.

China

The Solow model basically states that as more rural and backward economies start to develop, they will use more intensively their cheap labor and savings for investment more than already developed nations, and ____________ between rich and poor nations will eventually occur.

Convergence

in 1846 Britain repealed its ________________, which opened its market to agricultural imports and ushered in a period of free trade.

Corn Laws

Nations that have at various times used strongly neomercantilist policies to achieve growth in the postwar era are: A) Japan B) South Korea C) China D) All the above

D) All the Above

According to dependency theory, why do LDCs remain underdeveloped? A) they are unable to transition from capitalism to socialism B) they are dependent on food aid to keep their population alive C) Karl Marx was not read enough by their elites D) Their dependency on industrialized nations prevents them from acquiring capital and technology for their own development

D) Their dependency on industrialized nations prevents them from acquiring capital and technology for their own development

"When a state makes the shift from being a poor, developing nation to a wealthy, developed one, which of the following is expected to occur?" A) the state will purchase or otherwise obtain access to the ocean B) malaria will be eradicated C) it will meet the millennium development goals for developed countries D) population growth will slow

D) population growth will slow

John Stuart Mill is most noted for advocating A) less state regulation of the economy B) neomercantilist strategic trade policies C) economic nationalism and socialism D) state action in cases where individual initiative might be inadequate in promoting social welfare

D) state action in cases where individual initiative might be inadequate in promoting social welfare

Which of the following pieces of evidence convincingly refutes the claim that developing countries are poor due to corruption and poor governance? A) the high incidence of poor countries in malarial areas B) the existence of poor countries which do not have high growth rates C) the existence of rich countries with corruption D) the existence of well governed yet poor countries

D) the existence of well governed yet poor countries

According to PPP estimations made by the World Bank global poverty at $1.25 or below a day, global poverty has __________.

Decreased

The rise of Great Britain as the preeminent industrial and trading power in the 19th century contributed to a revival of mercantilism under the guise of _________.

Economic Nationalism

Dependency theory and the Modern World Systems theory are two key pillars of the classical liberal perspective. True or False?

False

From the modern world systems perspective, the international system is more dynamics and divided into a capitalist core, a semiperiphery, and a periphery. In Wallerstein's theory, the international division of labor and exploitation is static. True or False?

False

Human development index is arrived at exclusively by establishing the cost of a basket of necessary goods in terms of local currencies. True or False?

False

In his famous book The Wealth of Nations, Smith opposed capitalism in favor of the state creating wealth — a clear mercantilist objective! True or False?

False

In the debate on how poor nations can develop and escape from poverty traps, institutional liberals, as should come as no surprise, agree with neoliberals, and argue for the exclusive role of the market. True or False?

False

Lenin argued that capitalism was able to delay its crisis through national economic expansion. True or False?

False

Mill argued that markets naturally provided "public goods." True or False?

False

Once a country is in a poverty trap, it is impossible to escape. True or False?

False

Purchasing Power Parity is a composite index based on: Life expectancy, Adult literacy, school enrollment, GDP (Gross Domestic Product) per person (at purchasing power parity). True or False?

False

Raul Prebisch, an Argentine economist and prominent dependency theorist, attempted to pin down exactly the mechanism in the international economic system that explained this structure of dependency. He noted that the terms of trade inherently worked in favor of periphery nations at the expense of the core. True or False?

False

The GATT had detailed and extensive policies on the connection between international trade and the environment. True or False?

False

The Solow model is often referred to as divergence theory inasmuch as it predicted that the gap between rich and poor countries would widen over time. True or False?

False

The World Bank (International Bank for Reconstruction and Development) was established in the late 1990s to play a role in reconstructing Iraq. True or False?

False

The paradox of thrift accounts that both investors and consumers want to spend during a recession or depression, thereby increasing employment and enhancing the chances of recovery. True or False?

False

The pollution of waterways that border more than one country is an example of a global environmental issue. True or False?

False

International Political Economy of the Environment is linked to the field of ______________.

Global Environmental Politics

Alexander Hamilton and Friedrich List both wrote that a strong state was necessary if a nation intended to compete with the manufactured goods of the leading industrial power of their day. The dominant industrial power at the time was

Great Britain

In addition to the Human Development Index, another measure of well-being is often referred to as _______________________.

Gross Domestic Happiness

Alexander Hamilton argued for the protection of the US __________ and a strong role for the state in promoting its own domestic industries

Infant Industries

The dominant theoretical approach to development among Latin American intellectuals during the 1960s was ______________________ .

The Dependency Theory

Which period of history is often called the mercantilist period?

The period of nation-building in Europe and elsewhere was roughly 1600 to 1850.

According to Andre Gunder Frank, Latin America's underdevelopment was not due to its supposed historical backwardness or presence of traditional societies but instead resulted from their exploitation by industrialized nations. True or False?

True

According to Peter Lesson, Adam Smith's view on development over two hundred years ago that: "little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism, but peace, easy taxes, and a tolerable administration of justice; all the rest being brought about by the natural course of things" is still true today. True or False?

True

According to classical liberalism, "competition regulates economic activity; consumer self-interests motivate economic activity (individual self-interest serves society's interest)." True or False?

True

According to neomercantilists, China's remarkable record of economic growth - and the country's ability to bring millions of its own citizens out of absolute poverty-was certainly NOT the product of hands-off, laissez-faire state. True or False?

True

According to the liberal perspective, antimarket policies and attitudes explain why some countries are struggling to develop economically and are caught in poverty traps. True or False?

True

Adam Smith believed in the cooperative, constructive side of human nature. He believed that the best interest of all of society is served by (rational) individual choices, which when observed from afar, appear as an "invisible hand," that guides the economy and promotes the common good. True or False?

True

Adam Smith is the author of the now classic text on free market capitalism - The Wealth of Nations (true/false)

True

Adam Smith is the author of the now classic text on free market capitalism - The Wealth of Nations, True or False?

True

At the heart of the mercantilist perspective was the idea that economic gains by one nation-state came at the expense of other nation-states (as states competed for territory, for example), creating a zero-sum game (true or false)

True

Classical liberalism is rooted in reactions to many trends in seventeenth and eighteenth century Europe. Classic liberals respect the market and the individual, often distrusting the state, concerned over its potential to abuse power. True or False?

True

Game theory provides a mathematical framework for analyzing the decision-making processes and strategies of adversaries (or players) in different types of competitive situations. True or False?

True

IMF loan assistance in lieu of economic reforms was known as conditionality. True or False?

True

In the classical liberal view, a key assumption is that markets coordinate society's economic activities. True or False?

True

Institutional liberalism has roots in classical liberalism; however, this perspective believes governmental interference in the market to achieve a number of social objectives is necessary. True or False?

True

Institutionalist liberals such as Keynes do not assume that free markets are always positive sum. True or False?

True

Keynesianism refers to the ideas and policy recommendations of John Maynard Keynes during the Great Depression. Like Mill, Keynes believes that there are situations where the state must play a larger but still limited role in the economy in order act to protect society from the negative effects of infallible markets. True or False?

True

Mill believed that "selective state intervention in the market, including educating children and assisting the poor, would help correct the market's inherent inequalities." True or False?

True

Mill doubted the extent to which the competitive process and economic freedom of capitalism would turn the pursuit of self-interest into the service of society's welfare. True or False?

True

Non-tariff neomercantilist policies are often used by countries, such as non tariff barriers (NTBs), true or false?

True

Poverty traps can be caused by demographic, geographic, or political factors. True or False?

True

Stephan Krasner defines international regimes as sets of principles, norms, rules, and decision-making procedures around which actor expectations converge in a given issue-area of international relations. True or False?

True

The Big Mac index is used to compare purchasing power across countries. True or False?

True

The WTO incorporated sustainable development and environmental protection as explicit objectives for the international trading system. True or False?

True

The World Bank provides loans to developing countries to help them build up their infrastructure, expand primary and secondary education systems, develop their health care delivery capabilities, and help modernize their agricultural sector. True or False?

True

The basic logic of classical liberalism is that "markets help coordinate society's economic activity by allocating resources given the tastes and preferences of individual consumers", true or false?

True

The term "strategic trade policy" became synonymous with state efforts to stimulate exports or block foreign access to domestic markets, True or False?

True

What Raul Prebisch meant by "terms of trade" was that the primary goods — commodities such as tea, sugar, coffee, tin, etc.—produced and exported by poor countries tended to decline in exchange value over time while the industrial goods produced by rich countries tended not to decline or declined at a much slower pace. True or False?

True

"Poverty traps, broadly speaking, occur when an economic system lacks adequate ______"

capital

"Poverty raises the prospect that __________ will occur and that, in turn, increases the chances that a country will struggle to escape _______________"

conflict; poverty

Those in a poverty trap are often considered to be caught in a(n) ___________ of poverty

cycle

The example of malaria is used to demonstrate how ______________ can lead to a poverty cycle

geography

Poor nations tend to have __________ population growth and rich countries _________.

higher; lower

The Gini coefficient measures

inequality within a country

Purchasing Power Parity (PPP) is considered an ___________ measurement poverty levels.

objective

Critics of the World Bank have argued that the institution does not really understand the poor or poverty. To remedy this problem, some critics have created voices of the _________ as a means for the poor to speak for themselves.

poor

Countries that are stuck at a low or no growth state might be caught in a ______________.

poverty trap

National annual prices for a selection of products chosen from a basket of goods is used to determine a nations __________.

purchasing power parity

What is the link between civil conflict and poverty traps?

states expend resources on war instead of on more productive uses such as infrastructure

"The New International Economic Order, in the 1970s, is most closely affiliated with which of the economic perspectives?"

structuralism

Human Development Index is considered more of a ____________________ measurement of poverty.

subjective

The neoliberal response to the slow growth rate of the developing nations differs from that of the neo-mercantilist in that

the former advised that developing nations reduce government intervention and the latter encouraged greater government intervention

According to modernization theory, development was a process that transforms _____________ societies that are largely rural and often close to subsistence into urban industrialized societies with diverse economies that are driven by capitalist investment and entrepreneurship.

traditional

According to the etext, the ____________ economy is often not factored into the $1 a day measurement of poverty.

underground

The goals of the New International Economic Order of the 1970s were largely

unrealized as developed nations considered their ideology too radical

"For development purposes, corruption is problematic because it is"

wasteful

The example of Zimbabwe shows how ___________ lead to a poverty trap.

weak institutions