POLSCI 369 | Quiz 2

General Agreement on Trade in Services (GATS)

A WTO agreement governing the international trade of services.

B

A measure that restricts the quantity of an item that can be brought into a country is called a tariff. an import quota. an export quota. a duty.

Keynesian compromise

An aspect of the Bretton Woods system. Nations retain the ability to intervene in their domestic economies but agree to limit interference in international economic markets. States maintain sovereignty in controlling capital flows

Subprime mortgage loans

High-interest-rate loans to home buyers with above-average credit risk. Later packaged into MBS's which caused the 2008 financial meltdown.

A

One important trend of recent years has been the growth of regional trade blocs. Which of the following is not a regional trade bloc? the G20 the EU ASEAN NAFTA

Intellectual Property Rights (IPR)

Patents, copyrights, and trademarks that regulate use of inventions and creative works.

C

Place these four trade-related events in their proper chronological order: (a) TPP negotiations; (b) Uruguay Round; (c) Tokyo Round; (d) Doha Round. a, b, c, d d, b, c, a c, b, d, a c, d, a, b

D

Which country is the world's largest exporter of commercial services? Japan Germany The United Kingdom The United States

C

Which country or region has the highest share of global merchandise exports? China The United States The European Union Latin America and the Caribbean

C

Which indicator is most important when it comes to determining the balance of payments and whether or not a nation is going into debt? the balance of trade the capital account the current account none of the above

C

Which leader complained that by holding (unofficially) weak U.S. dollars, his country was helping pay for the unpopular Vietnam War? Harold Wilson of Great Britain Mao Zedong of China Charles de Gaulle of France Lester Pearson of Canada

A

Which of the following bodies is sanctioned to adjudicate trade disagreements between WTO members. dispute settlement panel the International Court of Justice TRIPS G20 none of the above

D

Which of the following did the Dodd-Frank Act require? Prosecution of Wall Street insiders Modification of mortgages for struggling homeowners. Tighter limits on bank executives' pay and bonuses in exchange for government bailouts of banks Banks' holding of more capital and collateral in reserve

appreciation of currency

a rise in the price of one currency relative to another

research and development (R&D)

a set of activities/investment intended to identify new ideas that have the potential to result in new goods and services

Toxic securities

a term for subprime mortgages during the 2008 financial crisis because of their toxic effect on a firm's capital and solvency

Global Value Chains

account for the full range of activities that firms and workers do to bring a product from its conception to its end use (e.g. S Korea's use of patents / control their own brands; China's Made in China 2025 campaign to turn country into tech powerhouse);In many GVCs Western firms deal with finance, basic research, design, product-branding, and marketing LDCs want to move up the value chain from low-wage manufacturing to more profitable activities

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

agreement of WTO, which requires countries to provide min level of IPR protection and enforcement

Regional Trade Agreements

agreements among nations in a particular region to reduce tariffs and develop similar technical and economic standards

The fixed exchange rate system

system in which the exchange rate for converting one currency into another is fixed by international agreement

The balance of payments

the difference between the flow of money into and out of a country (different between the current and capital accounts)

First sale doctrine

the doctrine that allows purchasers of a copyrighted work to resell it or rent it out (e.g., physical copy of copyrighted item)

law of comparative advantage

the idea that a nation is better off when it produces goods and services for which it has a comparative advantage

Nondiscrimination

the idea that countries would extend preferential trade status to all their trade partners

Quantitative easing

the introduction of new money into the money supply by a central bank. 3 rounds of this following the 2008 financial crisis, bringing us out of recession.

Currency exchange rates

the price of one country's currency expressed in terms of another country's currency

Fair trade

trade in which fair prices are paid to producers in developing countries.

Voluntary export restraints

voluntarily imposed limits on the number or volume of products exported to a particular country

Reserve Currency

Currency held in large amounts by governments for the purpose of setling international debts and supporting the value of their national currency.

Transatlantic Trade and Investment Partnership

a proposed trade agreement between the European Union and the United States, with the aim of promoting trade and multilateral economic growth

E

A mercantilist would most likely agree with which of the following statements about trade? Specialization in comparative advantage benefits all the parties engaged in trade. A persistent trade surplus will significantly harm a country. A country that liberalizes trade will enjoys higher rates of economic growth. Trade rules should be grounded in the principle of most favored nation treatment. None of the above

The Gold Standard

A monetary system in which paper money and coins are equal to the value of a certain amount of gold; tightly integrated intl. order managed by GB that existed until the end of WWI

Trans-Pacific Partnership (TPP)

A multilateral free trade agreement being negotiated by 12 Asia Pacific countries;2015

Uruguay Round

A series of negotiations under the General Agreement on Tariffs and Trade (GATT) that began in _____ in 1986 and concluded in 1994 with agreement to create the World Trade Organization. The ____ Round followed earlier GATT negotiations such as the Kennedy Round and the Tokyo Round. GATS and TRIPS

Doha Round

A series of negotiations under the World Trade Organization from 2001-2015. focused on agricultural subsidies, intellectual property, and other issues. Lack of progress —> Rise of RTA agreements; US in NAFTA to combat the rise of BRICS; Doha — who do we determine as developing or non-developing? • Liberalization and faith in free mkt econ threatened by rise of BRICS and especially China (threatens US manufacturing) ◦ US wanted Chemicals and industrial tariffs to 0 from China, which would collapse China's industries US and EU Did not want to open ag, services, and govt procurement

A

A toxic security is another name for bank mortgages and investments that lost a good deal of their value during the global financial crisis. credit default swaps. the U.S. version of SWFs. a new drink in honor of all the CEOs of major businesses who lost their jobs during the financial crisis.

Strategic trade policy

A trade policy wherein governments identify key industries that they wish to see grow and enact policies to support their development and success.

B

According to the theory of comparative advantage, mutually advantageous international trade is based on differences in the absolute abundance of natural resources. the relative cost of producing a good in different countries. which good a particular nation can produce at the lowest cost. the effective use of trade barriers and export subsidies.

North American Free Trade Agreement

Agreement signed on January 1, 1994, that allows the opening of borders between the United States, Mexico, and Canada.

Speculation

An involvement in business transactions in an effort to make a quick or large profit (invest in undervalued currencies); betting on a currency's future valuation

Patents

Confer exclusive right to make, use or sell an invention for a period usually of twenty years; makes R&D worthwhile for companies

Special and differential treatment

Exemptions for less developed countries from some of the obligations imposed on other members of the trade regime. protect infant industry, maintain high tariffs on ag imports and subsidize local industries; richest countries (US and EU) only willing to grant to poorest, but not China, Brazil India and Indonesia, as they gain more power

D

Financialization is closely associated with each of the following except shareholder value theory. increased stock buybacks. "impatient" investors such as private equity funds. higher levels of R&D spending over the long term.

A

For which region of the world do agricultural exports constitute the largest share of its overall merchandise exports? South and Central America Africa The Middle East Asia

D

IPRs are an important issue for developing countries because they need technology transfer for economic development. they would like to move up in global value chains. the cost of licensing IPRs from companies in industrialized nations can be high. all of these are important reasons.

Traditional Knowledge

Knowledge that is culturally held and passed on from generation to generation; accumulated knowledge and practices of indigenous communities as they relate to plants, plant uses, ag, land use, folklore and spiritual matters; commodified by northern countries for their own profits.

Deemed export controls

Limits the transfer of export-controlled items or protected tech info to foreigners working or studying in the US

B

Negotiations in the Uruguay and Doha Rounds were each organized as a "single undertaking," meaning that the agreed goal of the negotiations was a single tariff rate for imported manufactured goods, agricultural goods, and services. nothing was agreed until everything was agreed. tariff rates would be harmonized across all WTO members. WTO members pledged not to sign any other trade agreements during the Rounds.

Copyrights

Protect the expression of an idea: artistic like books, movies, TV programs, music, magazines, photographs, software (70 years)

Hot money

Quick money in and out of a country.

Trademarks

Signs or symbols registered by a manufacturer or merchant to ID its goods and services

D

Since 1944, the role of the IMF in the monetary and finance structure has been to increase the amount of liquidity in the international financial system. to ensure a stable international monetary system. to help countries with balance of payments problems on a short-term basis. all of the above.

C

Technically, the United States has a comparative advantage over the European Union in the production of commercial aircraft if the U.S. can produce more airplanes than can the EU. the U.S. can produce bigger airplanes than can the EU. production of airplanes in the U.S. requires less sacrifice of other goods than would similar airplane production in the EU. the U.S. market for airplanes is larger than the EU market.

Trade in Services Agreement (TiSA)

The Trade in Services Agreement is a proposed international trade agreement to liberalize the trade in services including healthcare, banking and transport. It focuses exclusively on services, rather than goods, and the 23 parties include the European Union and the United States.

D

The United States seeks to prevent foreign countries from accessing U.S. advanced technology by establishing deemed export controls. having CFIUS scrutinize foreign investments in the United States. limiting exports of dual-use technologies. all of the above.

A

The policy of the U.S. Federal Reserve to increase the money supply by purchasing hundreds of billions of dollars in bonds and mortgage-backed securities is called quantitative easing. crony capitalism. a Ponzi scheme. the Dodd-Frank Act.

C

The two main components of nondiscrimination in the GATT agreement are special and differential treatment. reciprocity and mutuality. national treatment and most favored nation treatment. multilateralism and sovereignty.

C

This event signaled the beginning of the Asian financial crisis in July of 1997: when foreign investors pulled most of their fund out of South Korea when the Thai government was overthrown in a military coup when the Thai government could no longer support the 25 to 1 value of the Thai baht to the U.S. dollar when the IMF signaled that Thailand's government was no longer worthy of credit

Most favored nation treatment

This non-discrimination principle means that a country treats all trading partners in a manner equal to that accorded to the most favored nation. This is a method for promoting free trade by ensuring equal trading opportunities among countries, especially as they relate to import duties and freedom of investment. Members of the World Trade Organization (WTO) negotiate this kind of tariff and trade arrangement.

Transatlantic Trade and Investment Partnership (TTIP)

Trade agreement between the US and EU.

Trade-Related Aspects of Intellectual Property Rights (TRIPS)

Uruguay round; required countries to maintain min standards for protection of patents, copyrights, and trademarks and enforce those standards

Committee on Foreign Investments in the United States (CFIUS)

Vets foreign investment in US for national sec threats 2016 - blocked Chinese investors from buying LED light company.... Vehicle of defensive mercantilism Dual use tech - used for military and defensive aims

B

What is "bitter medicine"? The fees major banks have imposed on customers to bring down bank debt Another name for austerity policies in Europe The U.S. TARP program A drink in honor of all the working class and poor who lost out during the financial crisis

Overvaluation of currency

When a depreciation of currency is needed to balance trade

Undervaluation of currency

When it is believed an appreciation of the currency is needed to balance trade, they will say the currency is undervalued

B

Which of the following do Balaam and Dillman posit is an important trend in the knowledge structure over the last twenty years? Human capital and technology are becoming less important than control of land and natural resources for wealth generation. Global profits are increasingly shifting to those who own knowledge and control distribution of knowledge-intensive goods and services. Knowledge is becoming less dispersed and easier for countries to control. There is a general consensus that most new technology should be in the public domain.

B

Which of the following is a basic principle of the GATT? freer trade in agricultural goods nondiscrimination preferential access strategic trade

C

Which of the following is a multilateral trade deal being negotiated between the EU and the United States? RCEP TPP TTIP TiSA

D

Which of the following is a reason why many states resist significant liberalization of trade in services? Worries that the state will lose monopoly control over the health care and education sectors Fears that foreign intelligence agencies will gain more access to information about one's citizens Worries that certain "ways of life" will be lost All of the above

D

Which of the following is an example of efforts by developing countries to advance their interests in the face of strong IPRs? turning a blind eye to counterfeiting of foreign goods lobbying for weakening of the TRIPS agreement issuing compulsory licenses all of the above

E

Which of the following policies would not be considered to be mercantilist? deemed export controls Made in China 2025 Optional Practical Training (OPT) d) "cash-for-citizenship" implementation of shareholder value theory

A

Which of the following statement is correct? The United States spends more money on R&D each year than any other OECD country. R&D has become less internationalized since the 1990s. In the EU and the United States, most R&D is funded by the government. R&D spending as a percentage of GDP is higher in the United States than in Japan.

B

Which of the following statements about exchange rates is incorrect? Between 2008 and 2017, the euro appreciated against the U.S. dollar. Between 2000 and 2008, the U.S. dollar declined in value relative to the euro and renminbi. Between 2011 and 2017, the yen appreciated significantly against the U.S. dollar. After 2004, the Chinese government let the renminbi depreciate against the U.S. dollar.

C

Which of the following statements about the financial crisis from 2007 to 2009 is incorrect? The U.S. Federal Reserve played the role of "lender of last resort." The Federal Reserve rescued AIG, one of the world's largest bank insurers. Under Obama, the U.S. Congress passed a $2 trillion stimulus spending package. The U.S. temporarily government gained majority ownership of General Motors (GM) and Chrysler.

D

Which of the following statements would an economic liberal probably agree with? Technological laggards need to fight for more "policy space" in IPRs. Developed countries use IPRs to monopolize Third World markets. Economic elites always seek to create private property rights from socially-produced knowledge. Strong IPRs create incentives for creativity and innovation.

D

Which of the following was not a characteristic of the fixed exchange rate system of the finance and monetary structure? The price of gold was fixed at $35 an ounce. The formal and informal rules of this system reflected a political bargain between the United States and Western Europe whereby the United States provided security to Western Europe in exchange for its acceptance of U.S. hegemony. The IMF used a variety of borrowing measures to regulate currency value adjustments. Currency values were allowed to adjust up or down freely according to supply and demand conditions in the market for the U.S. dollar.

A

Which statement about copyrights is correct? The TRIPS agreement stipulates a minimum time period for which member states must give protection to them. They confer exclusive rights over an invention for 20 years. They protect an idea, not the expression of an idea. They are signs and symbols to protect goods and services.

A

Which statement is inaccurate? The United States advocates for information sovereignty. The United States believes that information should usually be treated as an unpoliticized commodity governed by free trade principles. The United States is against data localization rules. The United States has a surplus in trade of digital and digitally-enabled services.

A

Which term refers to a process in which investors quickly shift their funds out of a nation in search of a "safe harbor" for their investments? capital flight a balance of payments crisis a speculative attack on a currency a panic attack

General Agreement on Tariffs and Trade (GATT)

a 1948 agreement that established an international forum for negotiating mutual reductions in trade restrictions;foundedonnondiscrimination(MFNandNationalTreatment)

The flexible exchange rate system

a currency system that allows the exchange rate to be determined by supply and demand

Depreciation of currency

a fall in the price of one currency relative to another

Dual-use technologies

defense-funded technological innovations with commercial and civilian use

National treatment

equal treatment for imported and local goods in a domestic market

Capital controls

limits on the flow of foreign exchange and financial investment across countries

Non-Tariff barriers

non tax methods of increasing the cost or reducing the volume of imported goods

Compulsory License

when a government allows someone else to produce the patented product or process without the consent of the patent owner; a license a state grants to domestic private company with/without consent of rights holder; allowed under TRIPS if govt negotiates w patent holder, compensates for it