POL235 All Tests for Final

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

A) Immanuel Wallerstein

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

A) Public Good

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

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

The idea that relative (based on opportunity cost) mattered more than absolute advantage led David Ricardo to develop the trade theory of___________

Comparative advantage

in 1846 Britain repealed its ________________, which opened its market to agricultural imports and ushered in a period of free trade.

Corn Laws

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

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

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

False

Trade generates a good deal of goodwill between the Northern and Southern nations. True or False?

False

What type of exchange rates system was the gold standard?

Fixed

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

Infant Industries

A pivotal player at Bretton Woods in 1944, that gave rise to many post world war II international institutions was_______

John Maynard Keynes

The most important feature of a floating exchange-rate system is that

Markets establish the values for currencies

Which indicator is most important when it comes to determining the balance of payments and whether or not a nation is going to debt?

The Balance of Trade

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

The Dependency Theory

Which period of history is often called the mercantilist period?

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

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

True

In a balance of payments accounting system, credits and debits must sum to

Zero

Drawing on this video https://www.youtube.com/watch?v=cijnV8P5UHE , you should be able to answer this question: What is GATT? GATT was an ________________ among 23 countries known as the contracting party.

agreement

Based on the discussion in this video https://www.youtube.com/watch?v=Ekm9Bayou8Y : WTO governance and decision-making is not ____________ but instead it is dominated by big powerful countries.

democratic

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

A) The international system is one of exploitation

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

A) international

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

A) the complex and changing issues in IPE

_____________ assumed that countries would engage in trade ONLY if they did not have an absolute advantage in what they could produce.

Adam Smith

Since its creation in 1944, the role of the IMF in the monetary and finance structure has been to

All of the Above

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

American System

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

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

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

B) exploiting less developed countries through imperialism

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

B) individual self interests and choices

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

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

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

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

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

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

The fundamental cause of collapse of the Bretton Woods was a _________________.

Balance of Payment Crisis

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

C) state

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

C) the law of gravity

The most important feature of a fixed exchange - rate system is that

Central banks establish the values for their currencies

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

D) All the Above

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

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

___________ argued that what matters in determining whether or not a country would engage in trade is its opportunity cost advantage in relationship to the different things that it can produce.

David Ricardo

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

The primary purpose of the international monetary system is to

Facilitate international monetary exchanges

Based on this video https://www.youtube.com/watch?v=38hvvAzgXZY , David Ricardo was the "first person to formalize a model on international trade". True or False?

False

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

False

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

False

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

False

Jimmy Carter was the sitting American President who presided over the end of the US dollar being Pegged to gold at $35 to gold at $45 an ounce and other currencies valuation tied to that of the dollar.

False

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

False

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

False

The GATT was one of the organizations formed at the Bretton Woods Conference. True or False?

False

The IMF, World Bank, and WTO are all specialized agencies of the United Nations. True or False?

False

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

False

GATT was the initials for ________________________.

General Agreements in Tariffs and Trade

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

Great Britain

In the balance of payments accounting system, if a country

Has a current account deficit, it must have a capital account surplus

In the balance of payments accounting system, if a country,

Has a current account surplus it must have a capital account deficit

The _________ theorem identifies the factors of production which determine a country's opportunity cost advantage.

Heckscher-Ohlin

According to the ________ perspective, free trade is not always a good thing. Sometimes the state needs to protect domestic industries and promote exports through strategic policies

Neo-mercantilist

President ________________________ put an end to the Bretton Woods post-war monetry regime when delinked the dollar from gold in 1971.

Nixon

In 1930 the US Congress passed _________________, which increased US tariffs to their highest level in the 20th century.

Smoot-Hawley Tariff

According to the _________ theorem, there are winners and losers with international trade.

Stolper-Samuelson

The debate in this video https://www.youtube.com/watch?v=FGwPiKxmpDI is about ___________________.

TRIPS

In the international monetary system, trade is linked to money through

The Balance of Payments

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

True

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

True

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

True

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

True

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

True

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

True

Based on information from the video https://www.youtube.com/watch?v=cijnV8P5UHE , It is correct to say that the Uruguay round "gave birth to" the World Trade Organization. True or False?

True

Based on this video https://www.youtube.com/watch?v=38hvvAzgXZY , Adam Smith assumed that countries would specialized in areas in which they had an absolute advantage. True or False?

True

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

True

During the Great Depression of the 1930s, protectionism spiraled upward while international trade decreased significantly due to the Smoot-Hawley Tariff Act in the US. True or False?

True

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

True

In 1947 the GATT was instituted based on the 2 basic principles of reciprocity and nondiscrimination, commonly referred to as the most favored nation (MFN) principle. True or False?

True

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

True

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

True

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

True

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

True

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

True

National treatment and the Most Favored Nation principle are both part of the GATT/WTO's nondiscrimination principle. True or False?

True

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

True

Overall, J.M. Keynes main idea was for Bretton Woods to create a liberal system of international economic relations among Western member states, while letting individual nations domestic markets and insulate them from depressions and other economic dislocations.

True

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

True

The WTO took over the GATT's role in 1995. True or False?

True

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

True

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

True

Unlike the GATT, the WTO has enforcement power through its Dispute Settlement Panel, which is empowered to interpret WTO agreements and authorize sanctions on member-states that violate trade rules. True or False?

True

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

True

Dependency theory articulates the argument that the core __________ the periphery.

exploits

From this video https://www.youtube.com/watch?v=38hvvAzgXZY , comparative advantage can be defined as a country that has an _______________ cost advantage of producing something over another country.

opportunity

David Ricardo claimed that free trade resulted in a _______ outcome for those countries engaged in it.

positive-sum

International ____________ are principles, norms, rules, and decision-making procedures around which there is a convergence of actors' expectations in an area of international relations.

regimes

According to _______ perspective, international trade is unfair. The international system is inherently biased against developing countries.

structuralism

Poorer developing countries which often produce and export primary commodities tend to face unfair __________ in relationship to rich countries that produce manufactured goods.

terms of trade

Based on this video https://www.youtube.com/watch?v=cijnV8P5UHE , you should have learned that GATT's goals were to remove _______________ and tariffs.

trade barriers

As with GATT, the World Trade Organization (WTO) multilateral trade negotiations on tariffs and trade takes place in what is referred to as negotiating ________

trade rounds