Lessons Learned 1

Nations that have at various times used strongly neomercantilist policies to achieve economic growth in the postwar era are

All of the above (Japan, South Korea, China)

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

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.

False

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

False

Mill argued that markets naturally provided "public goods."

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.

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.

False

The academic ______________ is the father of Modern World System's theory

Immanuel Wallerstein

Alexander Hamilton argued for the protection of the U.S. _____________ and a strong role for the state in promoting its own domestic industries.

Infant industries

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

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

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

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

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

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

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

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

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

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

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

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

In the liberal point of view, a hegemon is

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

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 ***

Adam Smith favored laissez-faire policies, where individuals would achieve social benefit guided by the invisible hand. The invisible hand stands for

individual self-interests and choices

Keynes played a pivotal part in extending the institutional liberal political economy perspective to the __________ level.

international

Which of the following ideas about free and open market is NOT associated with classical liberalism?

open markets results in zero-sum benefits to all

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 _______."

public good.

In light of market failures, J.S. Mill believed that the ________________ had a role to play in the economy.

state

John Stuart Mill is most noted for advocating

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