Global Issues Exam 2

FDI can often help a country by (select all that apply, there are one to four possible correct answers): - Generating employment and economic growth in host countries - Bringing in new technology and upgrading local labor skills - Helping build physical infrastructure in a host country - Increasing competition in a host country, making its industries more efficient

- Generating employment and economic growth in host countries - Bringing in new technology and upgrading local labor skills - Helping build physical infrastructure in a host country - Increasing competition in a host country, making its industries more efficient

East Asian states have pursued strategies that have included (select all that apply, there are one to four possible correct answers): - Strong investments in infrastructure and education - Closing their markets to all international competition - Withdrawing from the IMF and World Bank because of the 1997 East Asian economic crisis - Authoritarian force in the face of labor unrest

- Strong investments in infrastructure and education - Authoritarian force in the face of labor unrest

Generally, the United States does very well in the "Operations" macro-dimension, ranking 7th (scoring 913) in the 2021 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 117th? Food for thought: Why do you think the U.S. still scores 961 out of 1000? - Capacity to Retain Talent - Terrorism Incidence - Physical Property Protection - Availability of Police Services

- Terrorism Incidence

What international organization did John Maynard Keynes help create in the aftermath of the Great Depression: - The IMF - The U.S. Federal Reserve - The European Union - The Group of 20 (G-20)

- The IMF

How many people were forcibly removed from Africa as slaves during the 300+ years of Triangular Trade: 1-2 million 1.2 billion 250,000-500,000 10-15 million

10-15 million

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 109th Overall? - Costa Rica - Panama - Mexico - Nicaragua

Costa Rica

What accelerated the slowing in China's rapid economic growth after almost two decades where growth often exceeded 10 percent per year? - Sharp income and gender inequality - Covid-19 - War with Taiwan - Significant environmental collapse

Covid-19

The difference between foreign direct investment (FDI) and foreign portfolio investment (FPI) is that: - There is no difference, these terms mean the same thing - FDI is investing more in fixed assets (companies and real estate), as opposed to stocks and bonds (which is portfolio investment) - FDI is solely undertaken by states, whereas portfolio investment is primarily undertaken by NGOs - FDI has collapsed in the post-WWII era (to the point of inconsequence), while portfolio investment has soared

FDI is investing more in fixed assets (companies and real estate), as opposed to stocks and bonds (which is portfolio investment)

To stabilize currencies during the initial Post WWII era, countries: - Discouraged Free Trade Agreements, such as NAFTA - Actively devalued their currencies in a mercantilist effort to increase their trade balances - Fixed (or pegged) the value of their currency to the U.S. dollar, which was fixed to the price of gold - Abolished the IMF and created the World Bank

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

To stabilize currencies during the initial Post WWII era, countries: -Actively devalued their currencies in a mercantilist effort to increase their trade balances - Adopted the U.S. dollar or European euro as their local currency - Fixed (or pegged) the value of their currency to the U.S. dollar, which was fixed to the price of gold - Abolished the IMF and created the World Bank

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

Which country was at the head of East Asia's "flying geese"? - Taiwan - Singapore - Japan - China

Japan

Who founded the Grameen Bank in 1976: Mohammad Yunus Mohammad Naim Yunus Shea Namendra Grameen

Mohammad Yunus

IMF Structural Adjustment Programs (SAPs) have called for: - Large stimulus packages and increased government spending - Privatization (sale to private owners) of state-owned enterprises (SOEs) - Socialist practices, which is why they have been rejected by the "Washington Consensus" - Trade protectionism to shield infant industries

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

MF Structural Adjustment Programs (SAPs) have called for: - Large stimulus packages and increased government spending - Mercantilist oriented regulation in developing economies because of high poverty rates - Privatization (sale to private owners) of state-owned enterprises (SOEs) - Socialist practices, which is why they have been rejected by the "Washington Consensus"

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

Mercantilist approaches to industrialization, seeking to establish desired trade balances and trade profiles, include: - Promoting exports and protecting the economy by restricting imports - Adopting IMF Structural Adjustment Programs, which emphasize closed market strategies - Eliminating Non-tariff Barriers (NTBs) - Engaging in capital flows through U.S. Treasury Bills

Promoting exports and protecting the economy by restricting imports

What percentage of its budget does the U.S. give in foreign aid? Roughly 22% Roughly 6% Roughly 1% Roughly 10%

Roughly 1%

Match the foreign aid category to the right type:

Security Assistance: Counterterrorism, Weapons Procurement, Battling drug war, Military Operations. Economic Assistance: Health and Education Programs, Disaster Relief, Economic Development aid

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).

Singapore Chile Ireland United States China India

With which country did the U.S. sign a free trade agreement in 2007 (coming to force in 2012), adding transparency and openness to their relationship? - South Korea - China - Philippines - Indonesia

South Korea

Which countries were known as East Asia's "four tigers," following Japan with the export promotion strategy: - Taiwan, South Korea, Indonesia, Thailand - Taiwan, South Korea, Vietnam, Indonesia - South Korea, Taiwan, Hong Kong, Singapore - Taiwan, China, Vietnam, Thailand

South Korea, Taiwan, Hong Kong, Singapore

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 - The European Union - Foreign aid - The GATT

Structural Adjustment Programs

Which is NOT one of the challenges China faces today? - Sharp income and gender inequality - Ongoing international tension over islands in the South China Sea - Tens of thousands of popular protests each year - Taiwan's political integration with the mainland after 70 years of separation

Taiwan's political integration with the mainland after 70 years of separation

Where did the 1997 East Asian economic crisis begin? - China - Japan - Thailand - Taiwan

Thailand

The creation of the WTO in 1995 included: - Only the top 20 global economies (the G-20), but it still covered more than 30% of global trade - All countries except the BRICS countries, because of illegal mercantilist practices - The creation of a trade dispute settlement mechanism with teeth, to resolve trade disputes amongst members - A weak mechanism to settle trade disputes, under which no penalties ever come about and cheating is flaunted

The creation of a trade dispute settlement mechanism with teeth, to resolve trade disputes amongst members

Floating exchange rates, which much of the world shifted to after 1971, differ from fixed exchange rates in that with floating exchange rates: - The government decides the value of the currency - The market determines the price of the currency - The currency only shifts upon World Bank mandates, called "floats" - The U.S. dollar or the European euro must be used in the transaction

The market determines the price of the currency

Why is trade policy "inevitably politicized"? - There are winners and losers with trade policies, and groups pressure governments to adopt policies beneficial to them - Politicians stand to gain significantly if they adopt FTAs, but lose significantly if they shift to protectionism - Because it is always easy for voters to understand trade policy - Prices are generally higher through FTAs (such as NAFTA), but can be lower with protectionist policies

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

Because of the tariffs placed on imported steel, aluminum, and other products by the Trump administration, the video points to which specific product the Canadians and Europeans targeted for retaliation? - Hotel services - Washing machines - Apple Computers - Military equipment

Washing machines

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? - IMF - Business Solutions Database - World Bank - Business Interactive Data Portal - CIA Word Fact Book - World Bank - Doing Business

World Bank - Doing Business

Match the IGO to its function:

World Bank: Lender generally for longer-term development projects across the world IMF: Lender of last resort for countries that experience significant, but generally short-term, balance of payments problems WTO: Organization designed to foster more open international trade and settle trade disputes

"Aggregate GDP" is defined as "The nominal value (at official exchange rates) of all final goods and services produced within a country in a year (Constant prices)" as measured in Billions $US. Using the Charts Tab, recreate the Top 6 bar chart above or otherwise determine the difference between the output of the U.S. economy (#1) as opposed to the Indian economy (#6). Note, India divides its GDP among 1 billion more people than the United States! - $9,876,440,000,000 (i.e. roughly $9.9 trillion) - $15,498,120,000 (i.e. roughly $15.5 billion) - $15,246,810,000,000 (i.e. roughly $15.25 trillion) - $18,223,960,000,000 (i.e. roughly $18.22 trillion)

$18,223,960,000,000 (i.e. roughly $18.22 trillion)

What percentage of people in India have "Access to Sanitation" (found under "Environmental Sustainability" and then "Water Access")? - 68.25% - 16.06% - 28.95% - 41.05%

- 16.06%

"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)? - 12.5%, placing the U.S. in the middle of the world rankings - 36.6%, ranked 57th in the world - Only 25%, ranked 18th in the world - 51.1%, highest in the world

- 36.6%, ranked 57th in the world

What was the gold standard? - The Chinese desire for superior opium (known as "golden opium") - The British Navy, known as the "gold standard" on the high seas - Brazil's ending of slavery in 1888, which was undertaken after huge British investments - A fixed exchange rate system that set each country's currency values in terms of gold, facilitating trade and investment

- A fixed exchange rate system that set each country's currency values in terms of gold, facilitating trade and investment

The first steps in opening the Chinese economy included (select all that apply, there are one to four possible correct answers): - Allowing businesses to sell excess production on the market, once they had fulfilled government quotas - Eliminating all state-owned firms in favor of private entrepreneurship - Sending students overseas for training, particularly to the U.S. - Adopting IMF/World Bank conditionality tied to Structural Adjustment

- Allowing businesses to sell excess production on the market, once they had fulfilled government quotas - Sending students overseas for training, particularly to the U.S.

What does the M-PESA service do? - Allows money to be stored on a mobile phone and transferred between account holders via text message - Transfers micro-loans to women through the Grameen Bank - Facilitates the distribution of U.S. foreign aid to Kenya - Allows for conditional cash transfers with outlays from the Bolsa family

- Allows money to be stored on a mobile phone and transferred between account holders via text message

For people and countries to develop and prosper, they need: - Free market systems without any government involvement in the economy or private capital - Charismatic leaders focused on protecting their country's economy from foreign goods - Capital (money) - Authoritarian governments that can dictate policies without popular interference

- Capital (money)

Why is it hard for Western companies to avoid investment in China? - China has more middle-class potential consumers than the United States has population, and it remains the world's manufacturing leader - As laid out in the accession agreement as China entered the WTO 2001, Western companies are obligated to invest in the Chinese economy - China pays enormous subsidies to Western firms to import their finished goods into China - China has by far the best agricultural inputs, such as cotton, for Western products

- China has more middle-class potential consumers than the United States has population, and it remains the world's manufacturing leader

For developing countries that mainly produce primary products, such as mining and agricultural goods (select all that apply, there are one to four possible correct answers): - Classical liberal arguments for open markets and free trade can be viewed with suspicion - South Korea's vast natural resource base provides a model for the best strategy of development - Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high tech imports needed for development - Trade deficits do not develop because they have a monopoly over their competition

- Classical liberal arguments for open markets and free trade can be viewed with suspicion - Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high tech imports needed for development

Under colonialism (select all that apply, there are one to four possible correct answers): - Mercantilist trade policies by the colonized peoples frustrated the Triangular Trade - Asian dominance in the Triangular Trade led to the colonization of China - Colonizing countries for centuries worked to develop local colonies, generally showing little progress because they lacked of political control - Colonies provided cheap labor and resources, and served as markets for the colonizers goods

- Colonies provided cheap labor and resources, and served as markets for the colonizers goods

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)? - Consumers spending less on cheaper foreign products in a wave of nationalism - Companies taking advantage of FTAs and a rules-based trading system - Companies getting direct funding (subsidies) from the government - Companies selling their washing machines at prices lower than what they're charging for the same washing machines back home - Companies selling their washing machines at prices lower than their cost of production - Consumers rejecting domestic products as inferior to foreign products

- Companies getting direct funding (subsidies) from the government - Companies selling their washing machines at prices lower than what they're charging for the same washing machines back home - Companies selling their washing machines at prices lower than their cost of production

The "animal spirits" are: - Confidence and optimism in the economy, which sparks economic growth - Government officials overspending during depressions, causing unnecessary waste - Predatory capitalists which cause recessions and depressions - Politicians' abilities to maintain "aggregate demand"

- Confidence and optimism in the economy, which sparks economic growth

Who initiated China's reform efforts that began a dramatic economic transformation? - Deng Xiaoping - Mao Zedong - Jiang Zemin - Bruce Lee

- Deng Xiaoping

Under Mao Zedong, China followed a socialist command economy, in which the government (select all that apply, there are one to four possible correct answers): - Did not see exports as a central part of the development strategy - Sent production quotas and other targets to businesses and farms that had been nationalized or collectivized - Owned the means of production and limited trade with the outside world - Almost completely banned foreign investment

- Did not see exports as a central part of the development strategy - Sent production quotas and other targets to businesses and farms that had been nationalized or collectivized - Owned the means of production and limited trade with the outside world - Almost completely banned foreign investment

The two main forms of foreign aid include: - Economic assistance and security assistance - Economic loans and refugee assistance - Refugee assistance and non-concessional loans - Food aid and donated weapons

- Economic assistance and security assistance

The OPEC driven oil price increases in the 1970s: - Led to oil producers in Latin America initiating structural adjustment programs in the Southern Cone - Prompted the Washington Consensus to call for import substitution in Latin America, eventually leading to structural adjustment - Helped lead to the Latin American "debt crisis" of the 1980s, as countries borrowed money deposited by OPEC countries and continued their import substitution strategies - Fostered deeper ties between Latin America and East Asia, especially China

- Helped lead to the Latin American "debt crisis" of the 1980s, as countries borrowed money deposited by OPEC countries and continued their import substitution strategies

Which of the following statements is true (select all that apply, there are one to four possible correct answers)? - Almost all the LDCs are former colonies and faced conquest, racism, and colonialist mercantilism prior to independence - In 1945 there were 92 states in the newly created UN, and 101 newly sovereign states have joined since - Latin American countries were the last to throw off the yoke of colonialism and gain independence - In 1945 there were 51 states in the newly created UN, and 142 newly sovereign states have joined since

- In 1945 there were 51 states in the newly created UN, and 142 newly sovereign states have joined since - Almost all the LDCs are former colonies and faced conquest, racism, and colonialist mercantilism prior to independence

Which of the following is true (select all that apply, there are one to four possible correct answers)? - In 2000, the bottom half of the world's population held less than 10% of the world's total wealth, while the top 1% held 64% - In 2000, the bottom half of the world's population held less than 1% of the world's total wealth, while the top 1% held 34% - In 2019 the bottom half of the world's population held less than 1% of the world's total wealth, while the top 1% held 45% - In 2019 the bottom half of the world's population held less than 10% of the world's total wealth, while the top 1% held 25%

- In 2000, the bottom half of the world's population held less than 1% of the world's total wealth, while the top 1% held 34% - In 2019 the bottom half of the world's population held less than 1% of the world's total wealth, while the top 1% held 45%

With the 1997 East Asian economic crisis, in which country did IMF-recommended belt tightening measures lead to open rebellion and many deaths? - Philippines - Indonesia - South Korea - Japan

- Indonesia

Mexico and Brazil are noted for: - Establishing the Grameen Bank - Cash transfers to African countries that meet IMF/World Bank conditionality - Eliminating their pubic debts by cutting spending on education - Introducing conditional cash transfer programs to poor households, conditioned on families meeting requirements such as keeping their children in school

- Introducing conditional cash transfer programs to poor households, conditioned on families meeting requirements such as keeping their children in school

What is true about China's Belt and Road initiative? - It involves countries with one-third of global wealth and over 60 percent of the world's population - It shows how U.S. foreign aid can be used to successfully support infrastructure development in LDCs such as China - It is a rival to the Grameen Bank in offering loans to the poor in Bangladesh - It shows the how China is using foreign aid to support democracy in the face of criticism over its treatment of the Uyghurs

- It involves countries with one-third of global wealth and over 60 percent of the world's population

What is NOT true about Bolsa Familia? - It distributes financial aid to over 12 million Brazilian families each month - It is the organization established by the Bolsa family in Brazil to offer micro-loans to the poor - In 2020, Brazil's populist right-wing government began cutting the program to reduce debt - Payments start at $21 per month and are usually distributed to mothers

- It is the organization established by the Bolsa family in Brazil to offer micro-loans to the poor

What is true about the Trans-Pacific Partnership (select all that apply, there are one to four possible correct answers)? - It was signed by 11 countries to counter China's growing strength and help set the rules of the economic road along the Pacific Rim - After going into force in 2012 it led to Japan passing China as East Asia's largest economy - The Trump administration pulled the U.S. out of the agreement upon coming to office - It was hotly disputed by both the left and right wings of the U.S. political spectrum

- It was signed by 11 countries to counter China's growing strength and help set the rules of the economic road along the Pacific Rim - The Trump administration pulled the U.S. out of the agreement upon coming to office - It was hotly disputed by both the left and right wings of the U.S. political spectrum

The stimulus spending during the "Great Recession" in the United States was based on the ideas of: - Adam Smith - Ronald Reagan - Alan Greenspan - John Maynard Keynes

- John Maynard Keynes

In the post-WWII era, the Scandinavian countries: - Joined liberal international economic institutions, but have also owned some industries and provided generous safety nets - Joined the communist bloc, allying closely with China and the Soviet Union - Were at the forefront of the international economy, surpassing even the U.S. in Aggregate GDP - Were by far the most liberal, rejecting state involvement in the economy and pressing for unfettered markets

- Joined liberal international economic institutions, but have also owned some industries and provided generous safety nets

When did the Tiananmen Square massacre occur? - June 4, 1989 - August 22, 2004 - October 1, 1962 - April 9, 1995

- June 4, 1989

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) - The Consumer Reports study showed the companies significantly broke the rules - LG and Samsung argued they followed the rules 100%, and simply have better products than Whirlpool - U.S. regulators in the Obama and Trump administrations repeatedly agreed that the companies are breaking international trade rules - The South Korean companies agreed, but said Whirlpool breaks international trade agreements even more - President Trump broke with previous stances against Chinese protectionism, and supported the South Korean companies

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

Examples of an "export promotion" techniques include (select all that apply, there are one to four possible correct answers): - Low-cost loans - Direct export subsidies - Undervalued exchange rates - The Smoot-Hawley Act in the United States - Protection of infant industries focused on exports - The Trump administration's 2018 tariffs on aluminum

- Low-cost loans - Direct export subsidies - Undervalued exchange rates - Protection of infant industries focused on export

Keynes biographer (Robert Skidelsky) sums up Keynes with three ideas, including (select all that apply, there are one to four possible correct answers): - 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 - The volatility in markets is healthy for an economy and states should work against "aggregate demand" - There are political downsides (even including revolution) if states take steps to address severe economic downslides - Markets are inherently volatile

- Markets are inherently volatile - 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

According to Keynes (as discussed by his biographer Robert Skidelsky), volatile markets can punish: - Only those who have made mistakes, showing market efficiency - Millions in society, for the mistakes of a few, causing social unrest - College students and professors, who must address low prices and high wages - The environment, because regulations tend to strengthen

- 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 - Cut-backs in government regulation to allow the "invisible hand" to allocate resources more efficiently - Privatization of public enterprises to improve efficiency - Cut backs in public spending to decrease deficits and improve efficiency

- More Government spending to increase aggregate demand

- The Grameen Bank: - Bailed India out of economic crisis in 1982 - Offers loans to the poor in Bangladesh - Offers structural adjustment programs to train the poor Is an Indian Bank at the heart of "Modinomics"

- Offers loans to the poor in Bangladesh

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 tax collectors - Document collection by the UN Secretariat - Content analysis of news articles and television reports by political scientists

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

In Export Processing Zones (EPZs): - Maquiladoras exist in tariff-protected enclaves - Bureaucratic red tape undermines the export promotion strategy - Products are assembled with duty-free imported parts and then exported - Products are assembled with duty-free imported parts, but export taxes keep the products from being exported

- Products are assembled with duty-free imported parts and then exported

The "Gini Index," represented in the map above, "measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution." What are the three most unequal countries in the world (i.e., scoring the lowest in the map above; consider using the Rank by Variable tab for accuracy)? - South Africa, Honduras, Botswana - Brazil, Namibia, Honduras - South Africa, Namibia, Zambia - Angola, Mozambique, South Africa

- South Africa, Namibia, Zambia

To get Samsung and LG to invest in their states: - South Carolina and Tennessee offered significant investment incentives, similar to the advantages the firms received in South Korea - California and Vermont made the companies central to their sustainability initiatives - Georgia and Florida offered large purchases of the companies' machines by state agencies once the jobs are created - Ohio and Michigan promised their residents would buy only Samsung and LG machines

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

Why did the Japanese economy falter in the 1980s (select all that apply, there are one to four possible correct answers)? - The Japanese economy was flush with money and there were some questionable investment decisions, particularly in real estate - Close relationships between business, government, and bankers led to ill-advised bank loans and economic decisions, preventing the normal growth and contraction of markets - Japan's strongly overvalued yen undermined its imports China overtook Japan as the U.S.'s major trading partner, undermining - Japanese businesses and the developmental state model

- The Japanese economy was flush with money and there were some questionable investment decisions, particularly in real estate - Close relationships between business, government, and bankers led to ill-advised bank loans and economic decisions, preventing the normal growth and contraction of markets

A challenge that has developed in recent years surrounding micro-lending has been: - The development of for-profit micro-lending aggressively pushing high-interest loans and focused on maximizing profit - Strong government opposition because it upends corrupt officials - U.S. opposition and holding back of foreign aid until this form of lending is stopped, as it undermines the business of U.S. for-profit banks - Too many NGOs that do not understand the micro-lending process

- The development of for-profit micro-lending aggressively pushing high-interest loans and focused on maximizing profit

As a result of the trade conflict over washing machines: - Prices have remained relatively stable, but the U.S. started pulling troops out of South Korea - The U.S.-South Korea FTA was suspended - The price of domestic washers went up, but foreign washers were much cheaper - The price of both foreign and domestically produced washers went up

- The price of both foreign and domestically produced washers went up

Developing countries (LDCs) often face "declining terms of trade" because: - Their exports (often agricultural goods or other primary products) often do not bring in enough capital to pay for their imports (often finished goods) - IMF conditionality has led to a loss of their comparative advantage - The IMF and World Bank strongly discourage them from benefitting from their comparative advantages, pushing them instead to industrialize through protected industries - LDC agricultural crops often cause health problems

- Their exports (often agricultural goods or other primary products) often do not bring in enough capital to pay for their imports (often finished goods)

Capital (select all that apply, there are one to four possible correct answers): - Today crosses borders at lightning speed, with over $6 trillion traded every day - In the past, largely stayed at home, in domestic banks and stock markets - Is another word for money - Can be in the form of foreign direct investment, foreign portfolio investment, foreign aid, and remittances from migrants sending money back home

- Today crosses borders at lightning speed, with over $6 trillion traded every day - In the past, largely stayed at home, in domestic banks and stock markets - Is another word for money - Can be in the form of foreign direct investment, foreign portfolio investment, foreign aid, and remittances from migrants sending money back home

Which statement below is INCORRECT: - Twenty-five of the bottom thirty-two countries in infrastructure are in Latin America - Only 15.5% of people in India have access to improved drinking water - Ten of the top eleven countries in "organized crime" are in Latin America - China and India are both in the top 5 countries with "missing women"

- Twenty-five of the bottom thirty-two countries in infrastructure are in Latin America

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? - Argentina, Chile - Algeria, Norway - Venezuela, Denmark - Myanmar, Sweden

- Venezuela, Denmark

Under now more assertive Chinese nationalism (select all that apply, there are one to four possible correct answers): - Western companies operating in China are caught between Beijing's demands for silence and Western demands to avoid forced labor - The government has shown a willingness to reexamine its harsh human rights practices - The government is more willing to require Western companies to follow its rules and to claim Western hypocrisy in the face of criticism - Many companies are bending to Beijing's pressure not to criticize Chinese human rights practices because the Chinese market is too large and the blowback in China too acute

- Western companies operating in China are caught between Beijing's demands for silence and Western demands to avoid forced labor - The government is more willing to require Western companies to follow its rules and to claim Western hypocrisy in the face of criticism - Many companies are bending to Beijing's pressure not to criticize Chinese human rights practices because the Chinese market is too large and the blowback in China too acute

Micro-lending tends to focus on: - Men, because of the gender bias in most LDCs - Women, who, studies show, are more community oriented and more likely to repay loans - Older recipients, who have matured enough to repay loans - Promoting high tech jobs, as they are the jobs of the future

- Women, who, studies show, are more community oriented and more likely to repay loans

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? - India, Nigeria - Zimbabwe, Mauritius - Zimbabwe, Bolivia - Cambodia, India

- Zimbabwe, Mauritius

One criticism of state efforts to attract international capital is that it can lead to: - Long-term shifts in comparative advantage, leading to absolute advantages by MNCs - An affirmation of socialist theory - A "race to the bottom," with countries lowering labor and environmental standards in order to compete - Democratization

A "race to the bottom," with countries lowering labor and environmental standards in order to compete

The map above shows that much of Europe scores well in "Customs Logistics", an important part of the trade process. (Customs Logistics is defined as "Efficiency in the clearance process--i.e., speed, simplicity, and predictability of formalities--by customs and other border control agencies"). Which country has the world's best customs logistics? - Germany - Denmark - Finland - Netherlands

Germany

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)? - Multilateral rules established by IGOs such as the IMF and World Bank - Health and product standards, technical and labeling requirements, etc. - Taxes placed on the import of goods - Governmental corruption and authoritarianism

Health and product standards, technical and labeling requirements, etc.

The value of a country's currency can have a significant impact on economic outcomes. For example, an overvalued currency will strengthen the ability to purchase imports, while an undervalued currency will allow a country to sell exports at lower prices. The RCII's Currency Over/Under Valuation variable is based on the Economist Magazine's "Big Mac" Index, which compares the price of a Big Mac around the world to assess currency over/under valuations. Use the chart above of the U.S. and China on Currency Over/Under Valuation. Which of the following is true: - Both the U.S. and Chinese currencies are currently accurately valued. - The U.S. currency was the worst in the world at not being over or under valued in 2012, while the Chinese currency was not significantly over or under valued. - The Chinese currency is now closer to it's accurate valuation than the U.S. currency, but the U.S. had been closer until 2016 - The U.S. and Chinese currencies are now clearly overvalued and not undervalued.

The Chinese currency is now closer to it's accurate valuation than the U.S. currency, but the U.S. had been closer until 2016

In total dollars, which country gives the most in economic aid? United Kingdom The United States Germany Japan

The United States

Because Samsung and LG faced retaliatory tariffs placed on them by U.S. regulators: - South Korea pulled out of the U.S.-South Korea FTA, shocking global markets and costing jobs - They turned their focus to selling washing machines in the much larger Chinese market - They turned their focus to selling washing machines in the much larger European market - They moved some production to China (and later Thailand, Vietnam, and the U.S.), which didn't face the tariffs placed on South Korea

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