Module 5-7 Questions

Tied to the focus in the Sustainable Development Goals (SDGs) on better quality education is a belief that (select all that apply, there are one to four possible correct answers):

- A focus on education, especially of girls, leads to improved family health and individual productivity - Better education leads to better use of higher technologies - Better education can lead to better participation in democracy

In 2015, the top recipient of both U.S. economic and military aid was:

Afghanistan

With respect to foreign aid, as a percentage of its national income/GNI, the U.S. gives:

Amongst the lowest level among rich countries (bottom third)

The two main forms of foreign aid include:

Economic assistance and military assistance

Which of the following was not part of the Millennium Development Goals, but is part of the Sustainable Development Goals (SDGs)?

Having peaceful and inclusive societies, justice, and accountable institutions (good governance)

The Grameen Bank:

Offers loans to the poor in Bangladesh

What percentage of its budget does the U.S. give in foreign aid?

Roughly 1%

To get Samsung and LG to invest in their states:

South Carolina and Tennessee have offered significant investment incentives, similar to the advantages the firms received in South Korea

The idea of comparative advantage is that:

States should specialize in producing the goods which they produce best and trade for goods that other states produce best

A challenge that has developed in recent years surrounding micro-lending in India has been:

The development of for-profit micro-lending and loansharks pushing more and more loans (followed by aggressive collection tactics)

Which of the following goals was NOT part of the Millennium Development Goals?

To dramatically reduce weapons sales worldwide

In total dollars, which country gives the most in economic aid?

United States

Micro-lending tends to focus on:

Women, who studies show are more likely to repay loans and spend money on their children's welfare

Winston Churchill described the political control of the Soviet Union over Eastern Europe as the:

"Iron Curtain"

For developing countries that mainly produce raw (often called primary) products, such as mining and agricultural goods: (select all that apply, there are one to four possible correct answers)

- Arguments for "comparative advantage" can be seen as developmental "dead ends." - Jobs are often low wage and low skilled

Whirlpool claims its foreign competitors engage in unfair competition. What are examples in the video of what "unfair competition" means (select all that apply, there are one to four possible correct answers)?

- Companies getting direct funding (subsidies) from the government

The UNDP's Human Development Index (HDI) is based on three factors, including (select all that apply, there are one to four possible correct answers):

- Educational attainment - Per capita purchasing power - Life expectancy at birth

Company costs can often be lower if (select all that apply, there are one to four possible correct answers):

- Environmental regulations are weakened, allowing them to pollute more readily - Age and gender discrimination laws are removed, allowing them to terminate employees at will - Minimum wage and workplace safety regulations are cut - Pensions, healthcare, and paid vacation rules are eliminated

President George W. Bush's decision to impose a temporary 30 percent tariff on imported steel in 2002 (select all that apply, there are one to four possible correct answers):

- Helped the steel industry by allowing U.S steel producers to gain a larger share of the local market - Was seen by some as a political move to help the president's reelection chances in key electoral states - Hurt U.S automakers, who had to pay higher prices for steel

Common ways to measure poverty include (select all that apply, there are one to four possible correct answers):

- Income - Consumption

Trends in income inequality include (select all that apply, there are one to four possible correct answers):

- Increase in global income going to the top 5% versus the bottom 5% - Rapid increases in income inequality in the United States since the 1970s

In the United States (select all that apply, there are one to four possible correct answers):

- Micro-lending has been supplemented by NGOs that give out "micro-grants" - Micro-lending has taken root through Grameen America and other organizations

Consumers (select all that apply, there are one to four possible correct answers):

- Often do not know the condition in which foreign goods are made - Have to grapple with whether to buy foreign goods that might have been made in sweatshops

What policy changes under Franklin Roosevelt contributed to declining poverty and inequality in the United States? (select all that apply, there are one to four possible correct answers):

- Progressive income taxes, taxing the wealthy at higher percentages than the poor - The creation of the GI Bill - Laws setting minimum wages and overtime bonuses - The establishment of Social Security and Medicare

While globally the number and percentage of people living on less than $1.90 a day has dropped dramatically since 1990, what is also true (select all that apply, there are one to four possible correct answers)?

- The number of people living on less than $3.10 a day has remained roughly the same (about 2 billion people) - Most of the gains have been in two countries, China and India (especially China)

With respect to the charge that LG and Samsung take advantage of unfair trade practices as far as washing machines are concerned: (select all that apply, there are one to four possible correct answers)

- U.S regulators in the Obama and Trump administrations have repeatedly agreed that the companies are breaking international trade rules - LG and Samsung have argus they follow the rules 100%, and simply have better products than Whirlpool

The United States ranks as the worst country in the world (scoring 1) when it comes to overall substance abuse, and the odd shaped radar chart above shows that Americans abuse three specific substances more than any other country. Match the substance to the U.S.'s score.

1- Cannabis, Amphetamines, Opioids 56- Cocaine 208- Alcohol 437- Tobacco 612- Opiates

Countries need capital to develop and prosper, and one way they get capital is through Foreign Direct Investment (foreign investing in fixed assets like businesses or real estate). Use the Rank by Variable tab/tile to recreate the above histogram of "FDI Inflows (Mil USD)." Use the corresponding Rank by Variable table to rank in order the top three countries receiving the most total FDI inflows.

1-United States 2-China 3-Singapore

Order the following countries from the country that exports the highest volume to the country that exports the lowest volume by recreating the chart above or using "Aggregate Exports (Bil USD)" on Rank by Variable.

1. China 2. US 3. India 4. Russia 5. Brazil 6. South Africa

Keynes biographer (Robert Skidelsky) sums up Keynes with three ideas, including (select all that apply, there are one to four possible correct answers)

1. Markets are inherently volatile 2. Large scale unemployment can develop in volatile markets 3. Nothing can stop a downward spiral and growing unemployment in a depressed economy unless the government steps in with public spending to replace a lack of private spending

States use different types of trade strategies to try to improve economic outcomes, some are more "classic liberal," believing that freer trade will eventually benefit all economies, while others pursue more protectionist policies to try to guide the market and help local producers and populations. Recreate the bar chart of "Barriers to Trade" above and list the countries from more open (scoring highest) to more protected (scoring lowest).

1. Singapore 2. Chile 3. United States 4. Ireland 5. China 6. India

Developing countries that have pursued the protectionist "Import Substitution" strategy for development have used tariffs, business regulations and licenses, quotas, and bars on some imports to protect their markets while they seek to build domestic industries. India, for example, was known as the "License Raj" for all the procedures and licenses/permits required to do business, and we see the legacies of this "License Raj" today. Using the "Business Transactions" sub-dimension under "Operations," match the data point for India to the listed variable.

10- How many "Procedures to start a Business" (men or women) 1445- How many "Days to Get a Construction Permit"? 57.93- How many "Days to Register Property"? 49.7- What is the country's "Total Tax Rate"? 129- What is the country's rank on "Registering Property"?

In the map above Venezuela stands out for its high inflation rate in 2019 ("Inflation" is defined as: "the annual percentage change in the price of goods and services"). What was Venezuela's inflation rate in 2019?

200,000%

When deep recessions and depressions hit and there is sharply rising unemployment, "contemporary liberals" believe governments, as the only spender left standing to keep people on the job, should step in and start spending, even if they are already in debt. This step is exactly what occurred during the 1929 Great Depression and the 2008-2009 Great Recession. Match the United States "Total Public Debt (% of GDP)" to the appropriate year. What direction do you think the below longitudinal line went after the 2020 Covid-19 crisis?

2006- 64.17% 2008- 73.67% 2010- 95.40% 2012- 103.22% 2014- 104.41% 2016- 106.82% 2018- 104.26%

Spain saw a major spike in its unemployment rate with the onset of the Great Recession in 2009 ("Total Unemployment Rate" is defined as "percentage of the civilian labor force that is without jobs"). Recreate the Advanced Bar chart of "Total Unemployment Rate" (raw data) below and match Spain's unemployment rate to the year. What do you think happened after the COVID-19 crisis emerged in 2020?

2009- 17.9% 2011- 21.4% 2013- 26.1% 2015- 22.1% 2017- 17.2% 2019- 13.9%

"Public goods," ranging from clean air to infrastructure to public education, are goods equally available to everyone, and where the use by one person does not reduce the availability to another. They are often under produced in free markets, leading governments to take a role in their provision. What is the United States' RANK in "Basic Education Indicators" and "Education and Training," respectively?

24th and 10th

"Total Tax Rate (% profit)" is defined as "...the amount of taxes and mandatory contributions payable by the business in the second year of operation, expressed as a share of commercial profits." What is the U.S.'s Total Tax Rate (% profit)?

36.6%, ranked 62nd in the world

A country's ability to establish rule of law is an important part of security, markets, and overall development. Recreate the histogram above using the Rank by Variable Tile/Tab and match the country to the letter pointing to where it fits in the histogram of "Reliability of Police Services," defined as "The extent that police services can be relied upon to enforce law and order (1 = cannot be relied upon at all; 7 = can be completely relied upon)." Does anything surprise you?

A- Mexico C- US D- Canada

The World Bank and the IMF are part of what post-World War II system?

Bretton Woods system

Recreate the longitudinal chart below of the world's six largest economies to answer the following question: Which country has gained the most in "Aggregate GDP" size since 2005?

China Answer choices: U.S, U.K, Japan, China, India, Germany

This bar chart depicting "National Savings Rate (%GDP)" includes China, Ireland, South Korea, the United States, and Greece. Recreate the chart and list the countries in order of highest "National Savings Rate (%GDP)" to lowest "National Savings Rate (%GDP)". Does anything surprise you?

China, Ireland, South Korea, United States, Greece

The number of businesses registered to lobby in Washington has:

Coincided with the intensified gerrymandering that protects incumbents

The "animal spirits" are:

Confidence and optimism in the economy, which sparks economic growth

LDCs have often been unable to take advantage of their "comparative advantages" in agricultural production because (select all that apply, there are one to four possible correct answers):

Corrupt leaders in LDCs have stolen profits and/or siphoned off outside loans meant to strengthen comparative advantages MDCs protect their own agricultural production from cheaper imports from LDCs

Infrastructure is an important part of a country being able to engage with global markets. Which country is blocked out in the clusters table below showing "Quality of Roads," ranking second to last among the "Emerging Markets," close to last in Latin America and the Caribbean, and 115th Overall?

Costa Rica

Purchasing Power Parity:

Estimates the number of dollars needed to buy comparable goods in different countries, making comparisons more accurate

What happened at the 1884-1885 Berlin Conference?

European countries divided up Africa without much regard for local peoples or existing ethnic divisions

To stabilize currencies during the initial Post WWII era, countries:

Fixed (or pegged) the value of their currency to the U.S dollar, which was fixed to the price of gold ($35 for 1oz. gold)

Classic liberal trade theory holds the view that: (select all that apply, there are one to four possible correct answers)

Free trade without governmental interference will eventually benefit all economies in the international system by ensuring efficiency in the production and distribution of goods and services

Which country has the worlds best customs logistics? (Germany, Denmark, Finland, Netherlands)

Germany

Please match the country below with its current account balance as a percentage of its Gross Domestic Product.

Germany- 6.97% Singapore- 16.55% Ireland- 10.8% United States- -2.52% China- 1.05%

Which of the following statements is true?

Globally, the top one-fifth of the population (roughly 1.5 billion people) has more than three-quarters of the world's consumption (about $60 trillion), while the bottom one-fifth (roughly 1.4 billion people) has about $1 trillion in consumption

Since the 1980s, many "developing" countries have liberalized trade and investment, often because they have had to accept IMF Structural Adjustment Programs (SAPs) and open their economies. Many, however, still have considerable barriers. For example, "International Shipments Logistics" is defined as "Ease of arranging competitively priced shipments. " What are the two biggest outliers in the histogram above, with the poorest international shipping logistics? Do you know anything about the challenges these countries face?

Haiti, Zimbabwe

The North American Free Trade Agreement (NAFTA)

Has led to some lower skilled jobs shifting to Mexico, where wages are lower

Market-oriented reforms in China:

Have been relatively gradual and strictly controlled by the state

Since the 1980s, middle class families have primarily maintained consumption by (select all that apply, there are one to four possible correct answers):

Having more two income families (with more women entering the workforce) Increasing their debts Working longer hours

Definitions are found on the "Maps," "Country Profile," and "Rank by Variable" tabs by clicking on a variable name. Using one of these tabs, drill into "Barriers to Trade" and click on "Prevalence of Non-Tariff Barriers" (here's the path: ECONOMICS/Market Access/Trade Profile/Barriers to Trade/Prevalence of Non-Tariff Barriers). Within the definition, what are listed as Non-Tariff Barriers (NTBs)?

Health and product standards,

Within the definition of "Prevalence of Non-Tariff Barriers," what are listed as Non-Tariff Barriers (NTBs)?

Health and product standards, technical and labeling requirements

The primary role of the IMF is to:

Help stabilize a country's economy when the country has severe budgetary imbalances

The work of Thomas Picketty documents that, with the exception of the mid-20th century:

Income from capital (wealth, ownership, inheritance, etc.) nearly always exceeds income from wages, increasing inequality

The World Bank is considered which type of actor?

International Governmental Organization (IGO)

Mexico and Brazil are noted for:

Introducing direct transfer payments to poor households, conditioned on families meeting requirements such as keeping their children in school

The first steps in opening the Chinese economy included (select all that apply, there are one to four possible correct answers)

Inviting foreign firms to form joint ventures with state-owned manufactures to produce for export

As noted in the introduction to this lesson, "contemporary liberalism" (often associate economically with the ideas of John Maynard Keynes):

Is tied to the idea that classical liberalism is volatile and prone to recessions and depressions, so states should try to manage capitalism and maintain "aggregate demand"

The stimulus spending during the "Great Recession" in the United States was based on the ideas of:

John Maynard Keynes

As noted in the video, repeated studies have indicated that more generous people (select all that apply, there are one to four possible correct answers):

Live longer Feel more fulfilled

According to Keynes (as discussed by his biographer Robert Skidelsky), volatile markets can punish:

Millions in society, for the mistakes of a few, causing social unrest

What is Keynes' approach to stimulating a depressed economy?

More government spending to increase aggregate demand

The liberal world economic order sought by the United States and other Western countries after WWII was based on:

Open markets, freer trade, and free flowing capital

Neo-liberal advocates of the "Washington Consensus" argue that:

Opening economies to free trade, cutting back state budgets (fiscal responsibility), and privatizing state-owned enterprises is the best strategy for the developing world

In the PBS video, it is noted that (select all that apply, there are one to four possible correct answers):

People feel entitled even when games like Monopoly are obviously rigged in their favor People in expensive cars are more likely not to stop at pedestrian crosswalks More affluent people are more likely to take candy that they know has been left for a child

Using the definition for the "Logistics" sub-dimension, determine what the "Logistics" data is based on (definitions are found on the Maps, Country Profile, and Rank By Variable tabs).

Perceptive surveys of operators on the ground (global freight forwarders and express carriers)

IMF Structural Adjustment Programs (SAPs) have called for:

Privatization (sale to private owners) of state-owned enterprises (SOEs)

When the European Union placed restrictions on the importation of U.S. beef containing growth hormones because of the EU's concern for public health, the U.S. government considered this policy a form of:

Protectionism, sparking a case before the WTO

One key reason international trade negotiations have stalled is because:

Remaining tariff barriers are in areas where poorer countries often have an advantage, such as the politically sensitive agriculture sector.

The idea of comparative advantage is that: (select all that apply, there are one to four possible correct answers)

States should specialize in producing the goods which they produce best and trade for goods that other states produce best

South Korea and other East Asian states have pursued strategies that have included:

Strong investments in education and efforts to allow the poor to share in rapid growth

Through ________, the IMF and World Bank set a series of often stiff requirements when establishing an agreement with a borrowing country, pressing such steps as trade liberalization, fiscal responsibility, and privatization.

Structural Adjustment Programs

During the Cold War:

Superpower competition between the U.S and U.S.S.R led to proxy wars in many developing countries, helping bring real economic development to a standstill

The most traditional protectionist barriers to trade are:

Tariffs (taxes on imports), though they are no longer the main form of protectionism for most countries.

Generally, the United States does very well in the "Operations" macro-dimension, ranking 6th (scoring 916) in the 2020 RCII. However, there are individual variables where the country ranks somewhat lower. Recreate the drill down table above using the Country Profile tab to answer the following question: What is the variable blocked out in which the U.S. ranks 126th?

Terrorism Incidence

A country's "Current Account Balance (% GDP)" is its "net trade in goods and services, plus net earnings from rents, interest, profits, dividends, and transfer payments (such as pension funds and worker remittances)" as a percentage of Gross Domestic Product (GDP)." (A positive percentage means a surplus; a negative percentage means a deficit.) Given this definition, what does the chart above signify? Note, the chart has an adjusted scale.

That China's trade surpluses have lessened since the onset of the Great Recession, while the U.S's trade deficits have lessened since the onset of the Great Recession

Examples of times when states worked to manage capitalism and maintain "aggregate demand" in the face of significant economic downturns include (select all that apply, there are one to four possible correct answers)

The Great Recession (2008-2009) The Great Depression The COVID-19 pandemic (2020)

What international organization did John Maynard Keynes help create in the aftermath of the Great Depression:

The IMF, International Monetary Fund

Which of the following is an example of a protectionist policy that had negative effects?

The Smoot-Hawley Act

Use the chart above of U.S. and China Currency Over/Under Valuation (raw data). In 2008-2009, with the onset of the Great Recession, which was true:

The U.S. currency was significantly overvalued, while the Chinese currency was significantly undervalued.

The decision to help Europe and Japan rebuild, such as with the Marshall Plan in Europe, showed that:

The U.S. needed rebounding markets for trade and investment

In his famous essay "The End of History?", Francis Fukuyama wrote that mankind may have reached "the end point of ... ideological evolution with the universalization of Western liberal democracy as the final form of human government." This mindset was championed by:

The Washington Consensus (led by the U.S and international financial institutions)

What is the definition of "GDP Growth"? Note, definitions are found on the Maps, Country Profile, and Rank by Variable tabs by clicking on a variable name.

The annual rate of change in nominal gross domestic product (Constant Prices) (IMF-World Economic Outlook)

Floating exchange rates, which much of the world shifted to after 1971, differ from fixed exchange rates in that with floating exchange rates:

The market determines the price of currency.

Which of the following statements is true?

The most dramatic gains in reducing hunger worldwide since 1990 have been in East and Southeast Asia (notably China)

As a result of the trade conflict over washing machines:

The price of both foreign and domestically produced washers has gone up

In a socialist system: (select all that apply, there are one to four possible correct answers)

The state owns and controls key means of production

In the United States:

The top 1% has 23% of the income, up from 9% in the mid-1970s, and similar to the level during the Great Depression

When countries raise taxes to give export subsidies to newly established exporting companies:

Their current citizens sacrifice so that future generations may benefit as "infant industries" seek to transform into powerful businesses

Why is trade policy "inevitably politicized"?

There are winners and losers with trade policies, and groups pressure governments to adopt policies beneficial to them

In response to the criticism that their work was undertaken at the "famously liberal" University of California Berkeley, the researchers point out:

They have run 30 different studies across thousands of people all over the United States, and the results are the same for liberals and conservatives alike

Because Samsung and LG faced retaliatory tariffs placed on them by U.S. regulators:

They moved some production to China (and later Thailand, Vietnam, and the U.S), which didn't face the tariffs placed on South Korea

In the game of monopoly seen on the video:

Those that have the game rigged in their favor are less generous and somewhat ruder

Which Millennium Development Goal was fully achieved?

To cut in half (from 1990 levels) the number of people living in extreme poverty (then defined as $1 a day, now $1.90)

Proponents of free trade argue:

Trade increases overall employment, and can shift jobs to where a country has comparative advantages

The removal or reduction of tariffs or quotas on the trading of specific goods to stimulate freer trade is known as?

Trade liberalization

As seen in the chart above, the North American countries score very poorly when it comes to all kinds of Greenhouse Gas Emissions. What is the lowest score of any of the three countries on any variable within these aggregate variables (i.e., you will need to drill into Carbon Emissions and Other Greenhouse Gasses for each country to find the lowest score across all variables and countries).

United States on CO2 Emissions (KT), score of 76

In recent years, a few countries, claiming to pursue socialist strategies because of the exploitative nature of capitalism, have made it exceedingly difficult for businesses to operate in their country. Other countries have pursued a strategy, often called democratic socialism, which includes significant government involvement in the economy, but also significant business competition. Which country in the radar chart above stands out as the worst in the world on each of the variables identified, and which country stands out for its ease of doing business?

Venezuela, Denmark

Because of the new tariffs placed on imported steel, aluminum, and other products by the Trump administration, the video points to which specific product the Canadians and Europeans area targeting for retaliation?

Washing Machines

Colonies (select all that apply, there are one to four possible correct answers):

Were generally drained of commodities, human capital, and/or money

A severe economic crisis like the Great Recession which hit in 2008-2009 is going to impact societies in many different ways, two key areas being unemployment and inflation. Using the charts on U.S. "Inflation Rate" and "Total Unemployment Rate" (raw data) above, determine which of the following statements is true.

With the Great Recession, inflation in the United States dropped sharply and remains below pre-crisis levels

On the Country Profile tab, drill down into the RCII structure under Operations and click on the "Business Transactions" sub-dimension name. What is the source of the data as noted in the definitions box?

World Bank- Doing Business

As seen in the chart above, the U.S.'s "Soundness of Banks" ranking plummeted during the heart of the Great Recession. This variable is defined as "In your country, how would you assess the soundness of banks? (1 = extremely low, banks may require recapitalization; 7 = extremely high, banks are generally healthy with sound balance sheets)." What is the original source of this survey data point?

World Economic Forum

The General Agreement on Tariffs and Trade (GATT) was the precursor to the:

World Trade Organization (WTO)