GOV 312L Exam 3

Oil is a key resource because: A) It transfers wealth from oil exporters to oil importers B) It never drops price C) It makes up a large share of total global consumption D) All of the above. (41.2)

C) It makes up a large share of total global consumption. ---> Oil prices can certainly drop, as we saw in 2014, and it transfers wealth not from exporters to importers, but the other way around.

Which of the following groups are likely to benefit from cutting carbon emissions? A) People living on the coast B) Financial Firms C) People born after 2025 D) All of the above

D) All of the above Those living on the coast would be less likely to have their homes and business destroyed. People born after 2024 would not be experiencing as extreme of weather. Lastly, financial firms can benefit from lower emissions by serving as the markets by which rights to pollute are distributed.

According to Samuel Huntington's description of democracy, a democracy cannot be corrupt. T/F (33.2)

FALSE ---> Huntington believes that the distinguishing characteristic of a democracy is that it holds free and fair elections. He argues that a democratic government may be short-sighted, corrupt, or inefficient, but this does not mean it is not a democracy. In his view, states that hold free and fair elections are democracies, regardless of their inefficiency or corruption

How are the price of a bond and the yield of a bond related? A) They have no relationship B) They move in opposite directions C) They are positively correlated / move in the same direction (37.5)

B) They move in opposite directions --> The price of a bond has an inverse relationship with its yield (Remember you can think about yields like interest rates) High-risk bonds with high yields have lower prices while low-risk, low-yield bonds have higher prices.

NATO was created primarily to provide an area of free trade in Western Europe. T/F (32.3)

FALSE ---> NATO was primarily formed as way to provide security for Western Europe against the Soviet Union. Colloquially, the 3 goals of NATO were to keep the Americans in, the Germans down, and the Russians out. That is, Western Europe wanted to make sure that the Americans helped provide security against the Soviet Union (Americans in and Russians out), and to ensure that Germany would not reestablish its military power over the European continent (keep the Germans down).

Quantitative easing is the sale of US Treasury bonds by the Federal Reserve to drive down their price and counter Chinese efforts to stimulate exports to the United States. T/F (37.3)

FALSE ---> Quantitative easing is the purchase of US treasury bonds and mortgage backed securities by the Federal Reserve in order to drive down long interest rates and grow the US economy. The downside of quantitative easing is that it may quicken the pace of inflation and thus hurt the economy in the long run.

The Ricardian model of trade implies that globalization will alter the distribution of income within an economy. T/F (36.2)

FALSE ---> Remember that the Ricardian model says nothing about the distribution of wealth being altered within a country as a result of trade. It implies instead that trade makes states wealthier overall. This distinction has important domestic implications. Free trade may help a country overall but hurt specific industries, such as steel or textiles. This tension helps to provoke domestic political conflict over trade policy.

9/11, terrorism and the 2003 invasion of Iraq did little to affect the global market price of oil. (41.1)

False ---> The global price in oil saw a significant rise in the early 2000s as a result of 9/11, the increasing fear regarding terrorism, and general crisis in the Middle East that resulted from the 2003 invasion of Iraq. The higher price created incentives for more costly and expensive exploration and opened the door for US shale producers.

According to lecture, the case against NATO expansion included (32.4)

NATO expansion unnecessarily threatened and antagonized Russia ---> Our discussion of the risks of NATO expansion focused on how it would antagonize the weakened Russia in the aftermath of the collapse of the Soviet Union. Many of these concerns raised in the 90s have proven to be well founded today given the current tension in US-Russian relations.

Weak property rights act as a barrier to development because the possibility of the theft of property by corrupt officials or other firms prevents people and firms from accumulating capital. (39.2)

TRUE

Most of the increase in global oil consumption since 2005 has been driven by increased demand from developing countries in BRIC countries. (41.3)

TRUE ---> The increasing global demand for oil comes largely from developing countries, most specifically the BRIC countries of Brazil, Russia, India and China. Many developed countries like the US and many states in Western Europe consume less oil now than they did in the early 2000s.

Which of the following best describes the US stance on Taiwan's territorial and independence claims? (Module 18)

The US has often flip-flopped its support, leaning towards whichever policy position would maintain stability in the region ---> The discussion on Chinese-Taiwanese relations covered how the US has not uniformly supported either side. The US will often lean one way or another, depending on which policy position is most likely to maintain stability and the territorial status quo

Which of the following is NOT an assumption made by Singer in his argument that wealthy countries have an obligation to carry out development? (Module 23) A. Sending money is more effective than sending physical materials like building supplies B. Wealthy countries know there is suffering around the world C. Aid is effective in alleviating suffering

A. Sending money is more effective than sending physical materials like building supplies Because 1) wealthy countries know that there is suffering happening in the developing countries and 2) aid is effective in alleviating this suffering

Which of the following groups/states are likely to suffer significant costs associated with cutting carbon emissions? A. Saudi Arabia B. Airlines C. Owners of coal plants D. All of the above. (43.5)

All of the above. ---> All three of the above groups would be hurt by efforts to cut carbon emissions, as each is dependent upon and profits from fossil fuels. Decreased dependence on fossil fuels would hurt both Saudi Arabia and the owners of coal plants while the increased price of oil from regulation would hurt airlines

What is the "tragedy of the commons?" (43.1)

An absence of property rights over a communal resourced leads to the overuse of that resource and limits the incentives for conservation ---> The tragedy of the commons describes a situation in which a lack of property rights over a communal resource decreases the incentive of consumers to take care of that resource. The most famous example of this problem is one involving a public square on which farmers can let their sheep graze. Each farmer will let his sheep graze as much as possible because he is not paying any cost for doing so. But notice that every other farmer has the same incentives. Thus, the communal square ends up being overused and ultimately is useless to the community.

What is a "mono-economy"? (Module 23)

An economy that depends heavily on the export of one good

The functions of money include: (37.5)

As a store of value, which facilitates the accumulation of wealth and value over time

A recent lecture gave Professor Moser a chance to relive some of his "glory days." In high school, he played on a football team that won a state football championship in Nebraska. However, he was not able to translate this success into a football scholarship at the Division I powerhouse of the University of Nebraska. Which of the following economic concepts does this anecdote illustrate? (35.4)

As the size of the market increases, so dose the intensity of competition within the market. --->The anecdote exemplifies how the intensity of competition in a market is a function of the size (sometimes measured by the number of participants) of that market. Dr. Moser, at an intimidating 170 pounds, could succeed in a small football market but not in the larger national market from which the University of Nebraska could recruit. Globalization increases the size of markets and thus makes competition for jobs and goods more intense.

Which of the following is an example of public goods that an international hegemon helps to provide? A. International exchange currency B. Safe shipping lines C. the hegemon acting as a market for distressed good D) All of the above (29.1)

D) All of the above --> In lecture we covered many public goods that the hegemon helps provide to the international system. Remember that this state is ultimately providing the public good because it is in its self interest to do so. For example, safe shipping lanes and the dollar serving as the international exchange currency are both advantageous to the US

The following countries are members of OPEC A) Saudi Arabia B) Venezuela C) Russia D) Saudi Arabia and Venezuela are while Russia is not (42.4)

D) Saudi Arabia and Venezuela are while Russie is not OPEC yields significant influence in the international sphere because of its ability to set oil prices and manipulate the market. OPEC has to balance maximizing profits with the backlash from developed countries- and the resulting focus on alternate sources of energy- that keeping oil prices high might bring about.

The practical ethics of environmental protection involves a conflict between: A. Short term and long term considerations B. Individual and community interests C. Individual rights of self-expression and collective rights to avoid discrimination. D. A and B only (44.2)

D. A and B only

Which of the following were cited as a cause of the peace among democracies? A. Elections B. Institutional checks and balances C. Shared democratic identity with other democratic regimes D. All of the above (34.4)

D. All of the above

The Federal Reserve: A. Plays an important role in setting the monetary policy of the United States B. Regulates the banking sector C. Is the lender of last resort to banks in the United States D. All of the above

D. All of the above ---> All three are characteristics of the Federal Reserve--the central bank of the United States. It is also worth noting that while the Fed is a bank, its chief goal is not profit, like standard banks. The goals of the Fed revolve around maintaining economic stability in the United States, particularly by controlling inflation through monetary policy

Why is monetary policy generally directed at keeping inflation rates positive, low, and stable? A. Because high levels of inflation reduce the value of personal savings by decreasing the purchasing power of consumers B. Because high levels of inflation reduce the value of many of creditor's key assets (particularly fixed interest rate loans) C. Because deflation can slow down economic activity as consumers wait for a lower price to make their purchases D. All of the above (37.1)

D. All of the above. ---> High inflation can be damaging to the economy because it reduces the value of currency held by consumers. It also devalues long term loans made by creditors. If you lend out $100 today at 3% interest, your asset (the loan) will fall in value if the inflation rate is over 3% for the loan period. At the same time, policymakers want a low inflation rate, generally around 2% in the United States. Deflation (when the change in prices is negative over the year) can also be damaging. An expectation of falling prices leads consumers to wait to make big purchases. If all consumers are waiting, then businesses are not selling their products and the economy slows down

Which of the following is a tool that a government can use to help inefficient domestic firms from going bankrupt? A. Provide cheaper loans B. Raise tariffs so foreign goods are more expensive domestically C. Offer lucrative government contracts D. All of the above (35.5)

D. All of the above. ---> In a true free market, inefficient firms go out of business because they are unable to compete. This effectively means that they are not able to cover their costs of production through their sales. In international trade, governments can protect domestic firms by engaging in all of the three activities listed here

Robert Dahl's "procedural minimal" preconditions for democracy include: A. Individual civil liberties like freedom of speech B. Universal adult suffrage (right to vote) C. Democratic sovereignty of elected bodies that possess real political power D. All of the above. (33.3)

D. All of the above. ---> these are the three overarching preconditions for democracy according to Dahl. Note that some democracies better embody these characteristics than others

According to lecture, what was one of the primary dilemmas for NATO at the time of its founding? (32.1)

European countries shrinking responsibility for their own security and relying on the US to provide military security ---> One of the key problems with NATO at the time of its founding revolved around the prospect of European shrinking. Because the United States invested so heavily in the collective security of Western Europe, these states were tempted to free ride and under supply resources for their own security

A comprehensive international agreement to cut carbon emissions might necessitate compensation (like financial transfers) from developing countries like China to developed countries like France or Germany. T/F (43.3)

FALSE ---> A comprehensive attempt to cut global carbon emissions may very likely involve payments from developed countries to developing countries. This is because many developed economies have already begun the move towards alternate forms of energy while developing economies have not. This means that this shift will be more costly for developing economies and may necessitate remuneration from developed countries

Individual members of Congress on average are MORE likely to support tariffs cuts than the President. T/F (36.5)

FALSE ---> Because individual Congressmen and Congresswomen represent smaller constituencies, they are more likely to oppose the reduction of tariffs. A tariff may be helping to protect a key industry or factory found in their district. In order to get re-elected, a member of Congress may fight to uphold tariffs even though on the aggregate it will hurt the economy. Because his or her constituency is larger, the President is more likely to fight to reduce tariffs

In the current era of globalization, bond markets have limited influence over governments that oversee large budget deficits. T/F (38.2)

FALSE ---> Bond markets can have a great deal of power over states with large budget deficits. If bond markets do not approve of the economic policies of a state, they can push the value of these bonds down by selling them off. These sales can make the continuation of budget deficits unsustainable as the government must pay higher interest rates to sustain them. In short, bond markets can punish states with large deficits by forcing them to pay higher interest rates

According to the interview with Dr. Findley, international aid donors are consistent in that they all funnel their aid and resources through the central governments. (39.3)

FALSE ---> Different states and organizations have different means of giving aid to other states.

According to lecture, in the past 35 years China has opened politically, moving away from authoritarianism and towards democracy, but has remained close economically, staying true to its communist doctrine (Module 18)

FALSE ---> Dr. McDonald argued the opposite in lecture, that while China has opened up economically, it has not done so politically. It is important to note that communism is an economic ideology that need not necessarily be married to any type of political ideology. Thus, China has moved towards a more free-market economy but its government maintains tight authoritarian control.

According to lecture, China's admission to the WTO provided little information to other countries about China's willingness to engage in long-term trade liberalization. T/F (31.4)

FALSE ---> During lecture we discussed how China's willingness to undertake costly domestic economic reforms to join the WTO signaled to other states that it was committed to long term trade liberalization

The delegation of control over monetary policy to Congress would help to solve the problem of inflation. T/F (37.2)

FALSE ---> Elected officials generally want to keep interest rates low to increase economic activity. This creates jobs and improves their reelection chances. However, extended periods of low interest rates tend to accelerate inflation. Our discussion in lecture outlined how unelected officials do not feel the pressure of elections and can thus more easily pursue policies that help keep inflation in check

Imagine that State A is a democracy and states B and C are both autocracies. Also, imagine that state C is a potential target for a military attack by either state A or state B. Given these assumptions, evaluate whether the following statement is true or false: The democratic peace hypothesis expects that state A is less likely than state B to target state C in a war. T/F (33.4)

FALSE ---> The Democratic Peace Theory says nothing about the likelihood of democracies going to war with non-democracies. It only states that democracies do not go to war with other democracies. In this case, the fact that state A is a democracy would matter only if its target, state C, was also a democracy

According to the reading from Encarnación, the first major wave of democracy promotion as a centerpiece of American foreign policy came after the end of the Cold War T/F (34.1)

FALSE ---> The first example of democracy promotion being a centerpiece of American foreign policy comes with President Woodrow Wilson. Encarnación argues that these interventions had more to do with imperial economic interests than it did with any real desire to spread democracy

Autocratic leaders are more likely to abide by their international commitments, say in trade pacts, than democratic leaders. T/F (33.5)

FALSE ---> The internal checks and balances within a democracy make it more difficult to renege on or withdraw from an agreement. Autocrats, on the other hand, face fewer internal political challenges to reversing a policy whenever they please. This difference in domestic political constraints affects how likely these states are to abide by international agreements.

US carbon emissions are currently at their highest point in 60 years, as industries are increasingly dependent on oil and coal. (Module 25)

FALSE ---> US carbon emissions are currently at the lowest they have been in the last 60 years. With increased regulation and a desire to avoid dependence on oil, US industries have already begun the move to alternate forms of energy. China and other developing countries, however, depend much more on crude oil to power their economies

Domestic concerns in China about internal political stability or income inequality in China have limited impact on its grand strategy. (Module 18)

FALSE ---> We discussed how the need to maintain domestic stability in China has greatly affected its foreign policy choices. By settling longstanding territorial disputes and trade issues (often through the WTO), China has sought to prevent any crisis or international issue from derailing its domestic economic growth. China wants peace in the global order so that it can maintain its tremendous economic upswing

The dollar had served as the chief currency used in international trade from the end of WWII until the foundation of the European economic zone, at which point the Euro overtook the dollar in this role. (Module 18)

FALSE ---> While the Euro is a valuable foreign currency, the fact is that around the world the dollar is still easily the trade and reserve currency of choice. As of January 2015, China alone owned over 1.2 trillion dollars in American treasury bond debt

Foreign aid has been proven conclusively be effective in helping to alleviate poverty. T/F (40.2)

FALSE --->Evidence for this statement is not conclusive. Many academics and policy researchers argue that foreign aid is not actually effective in helping to alleviate poverty. This is important when considering the moral imperative for sending aid because if aid is not effective, it undermines that case that it is ethically required.

According to hegemonic stability theory, global public goods like safe shipping lanes and a healthy ozone layer would be provided even without the presence of a hegemon in the international system. (Module 18)

FALSE --->Hegemonic stability theory predicts that without a hegemon, many global public goods would NOT be provided because of the freerider problem. A hegemon chooses to provide the public good for itself and without this leadership, states would be unable to overcome the collective action problem and the freerider problem

The Reciprocal Trade Agreement Act preserved Congressional authority to negotiate trade deals with foreign countries. T/F (36.3)

FALSE --->The RTAA delegated Congressional authority to make trade deals to the President for a fixed period of time. If the President failed in his duties of expanding trade, Congress could refuse to renew this authority. This institutional change made it easier for the President to negotiate reciprocal trade concessions with other countries and helped foster American support for globalization after World War II.

During the Cold War, the promotion of democracy was a central part of American containment policy. T/F (34.3)

FALSE During the Cold War it was presumed that the U.S. had to choose between containing communism and spreading democracy and when faced with this choice the U.S. tended to choose containment of communism

A Coasian solution to global warming suggests that governments should tax industries that produce fossil fuels. T/F (43.2)

FALSE The Coasian solution outlined in class is that of cap and trade. In this scenario, the government limits the amount that firms in within its borders are allowed to pollute. The government then either assigns or lets the free market decide how much each individual firm can pollute out of this national amount. Firms are essentially buying and selling the rights to pollute.

Academic research shows that most foreign aid sent from the US is based on moral concerns like alleviating poverty or reducing childhood mortality. T/F (39.4)

FALSE The research indicates that much of the aid has to do with more military and strategic goals. One example of this is US aid during the Cold War, when it was principally used to help contain the Soviet Union and prevent states from turning to communism.

According to Wilsonianism, democracy is not appropriate for states that have little or no experience with competitive politics. T/F (34.2)

FALSE Wilsonian foreign policy presumes that democracy is a universal value and thus can be adopted by any state, even those with little or no democratic experience

According to lecture, the strategic interests of the United States in the Middle East have been left unchanged by increased oil production from shale in the United States T/F (42.1)

FALSE With a greater ability to access growing domestic oil supplies, the lecture discussed how American dependence on Saudi oil production may be declining. As a consequence, the Saudis worry that the United States may be a less reliable military ally in the region.

According to lecture, what two factors affect current exchange rates? (38.5)

Interest rates and the expected value of a currency in the future ---> When interest rates go up, the value of a currency goes up. When the expected future value of a currency goes up, the current value also goes up.

Which of the following ethical perspectives discussed in lecture states that sending aid is not ethically mandatory because donors have obligations to citizens of their own society, but not those outside of it? (40.4)

Local Perspective ---> The local perspective focuses on the physical distance between donors and those suffering. Proponents of this viewpoint argue that citizens are obligated to help those that are geographically near and in their own society, not those that are far away

Which of the following is highlighted by Dr. Findley as a reason that foreign aid may increase violence? A) Sometimes aid actually consists of weapons and military hardware B) Rebels in a civil war attack recipients of foreign aid in order to steal it C) He actually argued the opposite, that foreign aid helps prevent violence (39.2)

Rebels in a civil war attack recipients of foreign aid in order to steal it

Which member of OPEC plays the largest role in influencing global oil prices? A) Russia B) Saudi Arabia C) United States D) Venezuela (42.2)

Saudi Arabia It generally does not produce at full output capacity so it can engineer price wars by increasing its sales volume. These price wars penalize other producing countries by pushing down oil prices and their revenues from oil sales. In the past, Saudi Arabia has been able to rely on threats to institute a price war to enforce production agreements within OPEC.

Which of the following is an international institution? A) The World Trade Organization B) The United Nations C) Sovereignty (31.5)

Sovereignty ---> We defined sovereignty as an institution because it is associated with a series of rules that create expectations about how states will conduct their relations with each other. Think about the United Nations and the World Trade Organization as international organizations rather than international rules (institutions). Organizations are political actors, institutions are rules that set how these organizations interact with each other

On average, democratic states tend to win the wars they enter because reelection incentives (namely, the fear of getting voted out of office for policy failures) push democratic leaders to be cautious when going to war. Consequently, democratic leaders generally fight only when they have a high probability of victory. T/F (33.1)

TRUE ---> Democratic leaders are beholden to their electorate and thus are more cautious when considering entering into conflicts. If a democratic leader loses a war, he or she may very well be voted out of office. Thus, the leader of a democratic country chooses to only engage in military conflict when the state is likely to win. On the other hand, a dictator can take more risks internationally because he or she faces of a diminished prospect of getting thrown out of office for foreign policy failures, like defeat in war

Singer argues that there is no difference between negative violence and positive violence. (40.3)

TRUE ---> He argues that killing someone and letting him or her die is morally equivalent. Allowing a child to drown in a pool and pushing him or her in to drown is the same. This philosophical assumption underlies his theory on the moral obligation to help in developing countries

Proponents of hegemonic stability theory argue that the post-1945 peace between major powers has been the result of American hegemony (Module 18)

TRUE ---> Hegemonic stability theory argues that a hegemon helps maintain both economic and political stability in the international order. Proponents point to the period after WWI, at which point America returned to isolationism, and the return to great power war in WWII as an example of what happens when there is no hegemon to lead the system

Even though international trade increases national income at an aggregate level, some groups within an economy will see their real incomes decline from globalization. (36.1)

TRUE ---> International trade makes the economic "pie" larger in that it increases the overall wealth of a state, but it also alters the distribution of income within that state. International trade helps to create jobs in sectors that rely disproportionately on factors that a state has in abundance, like college graduates in the United States. These industries see revenue growth through access to export markets. Managers in these industries seek to increase capacity to meet this growing market demand. They increase capacity by hiring more workers, which leads to higher wages. Industries that rely on factors that are scarce see job loss and lower wages as their products are increasingly purchased from foreign producers

After the fall of communism, many Eastern Europe countries such as Poland and the Czech Republic were eager to join NATO. T/F (32.2)

TRUE ---> Many of the Warsaw Pact countries wanted to establish close ties with the West and saw joining NATO as a critical step in this process. By joining NATO, they could be in the Western European collective security system.

Global oil consumption is inelastic in relation to price: that is, increases in the price of oil do little to affect global demand. (41.4)

TRUE ---> Oil is an inelastic good. Small changes in the price do little to affect the demand for it. Oil is so necessary to the global economy that many people have no choice but to simply pay the higher price.

Hegemonic stability theory implies that global trade flows could go down as the size of the Chinese, Indian, and the combined European economies approach that of the United States. (Module 18)

TRUE ---> One facet of hegemonic stability theory is that trade flows are increased by the presence of a hegemon. In other words, when there is one state that is considerably more powerful than the others, the global economic system has more trade than if there are a number of states that are relatively equal. Therefore, hegemonic stability theory would predict that if the Indian, Chinese, and combined European economies grow to approach that of the US, global trade flows would decrease

One of the difficulties in navigating the conflict between short-term and long-term consequences is that short-term consequences tend to seem more tangible and real while long-term consequences seem abstract. (44.3)

TRUE ---> Our discussion in lecture covered how short-term consequences seem concrete and real while long-term consequences, like increased temperatures and higher sea levels, seem more abstract. This can lead policy makers to be short-sighted in their decisions and to "kick the can" down the line to let future generations solve problems

According to lecture, Congress itself is not an institution but rules governing how members of Congress negotiate with each other and cast votes are institutions. (31.3)

TRUE ---> Remember that institutions are rules or laws that create expectations about how other will act (like how everyone in America knows how to drive on the right side of the road). Organizations are groups of individuals that have agency. This means that they have the capacity to act. Organizations often have their own institutions that shape how individuals interact with each other within the confines of that organization. In this case, Congress is governed through a series of rules that set when individual members can do such things as vote, debate, or offer amendments to a bill.

The Trifflin Dilemma refers to the tension stemming from the global economy's dependence on large budget deficits in the United States to generate a steady supply of new dollars necessary to sustain a growing global economy. (38.1)

TRUE ---> States around the world use US treasury bonds as reserve currencies for their own central banks. This heightens demand for these bonds and increases the dependence of the global economy on an expanding money supply in the United States. However, the Trifflin dilemma suggests that this demand for American bonds may accelerate inflation in the United States and devalue the dollar, which would decrease the value of central bank assets around the world

The International Monetary Fund (IMF) was founded to stabilize international currency markets and to prevent currency wars. T/F (38.4)

TRUE ---> The IMF emerged from the Bretton Woods meetings and was designed specifically to prevent the kind of currency wars that many world leaders thought helped to bring about the Great Depression. It helps to prevent large movements in exchange rates through the provision of emergency loans

In Western philosophy, the fundamental moral unit is the individual. T/F (44.1)

TRUE ---> The fact that in Western philosophical thought the fundamental unit is the individual has large ramifications for how Western philosophy views the issue of climate change. Whereas Eastern philosophy tends to value the well-being of the community and thus would stress collective action to avoid communal harm, Western philosophy would lean more towards a lack of responsibility of an individual to his or her community. States may feel they owe more to the economic well-being of their citizens than they do to the greater global community

The international organizations associated with Bretton Woods were designed to reverse the trend of protectionism that existed during the Great Depression and open international markets. T/F (36.4)

TRUE ---> The organizations that eventually came about from the Bretton Woods meetings, most notably the WTO, IMF, and the World Bank, were focused on undoing the protectionism from the Great Depression and opening up international markets. World leaders believe these protectionist tendencies helped cause and exacerbate the Great Depression. By joining their states to these economic organizations, political leaders sought to avoid another global economic meltdown

US oil consumption in 2013 was actually less than it was in 2001. T/F (41.5)

TRUE ---> US consumption of oil has actually decreased steadily since 2001. There are many reasons for this, including more efficient vehicles, regulation, new technologies, and consumer reactions to higher prices.

Some research suggests that securing U.N. approval for a military action raises public support within the United States for that action. (Module 19)

TRUE ---> UT professor Terry Champan finds empirical support for the claim that when the US secures UN approval for military intervention, it increases the domestic support within the US for that intervention

The Chinese government has sought to facilitate exports to American consumers by financing the budget deficits of the American government. T/F (38.3)

TRUE ---> We discussed this example to illustrate the political importance of exchange rates. Over the past few decades, the Chinese government has sought to stimulate exports to the United States by increasing the value of the dollar relative to the RMB. A stronger dollar made Chinese goods cheaper to the American consumer. To push the value of the dollar up in global currency markets, Chinese monetary authorities have had to purchase more financial assets, like US Treasury bonds and mortgage backed securities, denominated in US dollars

As interest rates go down, individuals help to boost economic activity by spending more money (rather than saving it). (Module 22)

TRUE ---> When interests rates go down, this means that the cost of borrowing money goes down. People and firms then tend to borrow money to make large purchases like homes and factories, which increase economic growth. This can also diminish the incentive to save as the return on assets like cash falls

Tariffs imposed by the U.S. government raise the prices of foreign products for American consumers. T/F (35.1)

TRUE --->Tariffs by a domestic government raise the price of foreign goods in that market. Remember, tariffs are taxes imposed on a foreign product after it enters into the United States. The foreign producer or retailer generally passes on the cost of the tariff to the consumer, which effectively raises the price of the good. For example, if the US imposes a tariff on foreign trucks, any truck from outside of the United States would have an additional cost (the tariff) that trucks produced inside the United States would not be subjected to. These tariffs help to make goods and services produced inside the United States cheaper relative to their foreign competitors

Distance acts like a natural barrier to trade because it can make some services, like haircuts or a dental cleaning, prohibitively costly to transport to consumers abroad. T/F (35.3)

TRUE The main reason that many services, such as haircuts, do not get traded is because it is so costly to trade them. Dr. McDonald may love fancy haircuts but he is unwilling to spend $1,000 to fly to Paris to get one when he can get a similar one in Austin without the additional cost of a plane ticket

According to power transition theory, why is war more likely between a state rising in power and a state declining in power than it is between two states whose power is expected to stay relatively stable? (Module 18)

The declining state, worried about its weakened bargaining position in the future, chooses to attack before its adversary grows too strong and it must make concessions --->Power transition theory predicts that war will occur because of the commitment problem. With one state declining and one state rising, the rising state cannot credibly commit to upholding in the future whatever deals or negotiations are struck now. Therefore, rather than bargaining from a less powerful position in the future, the declining state chooses to fight now

The principle of comparative advantage implies that greater levels of international trade increase national income. If presidents oriented their trade policies first around increasing national income, then which of the following policies would he or she be most likely to support? A) The elimination of tariffs on manufactured products like cars or electronics even though those tariffs help to keep some American manufacturing firms in business. B) The imposition of quotas that limit the quantity of textile imports from manufacturing competitors like China and India. C) Gov. financial support for firms in multiple industries to ensure that the United States has a diverse manufacturing base. (35.2)

The elimination of tariffs on manufactured products like cars or electronics even though those tariffs help to keep some American manufacturing firms in business. --->This question is designed to illustrate the tension that trade can create while it increases the aggregate wealth of an economy. Yes, trade based on comparative advantage will eliminate jobs in some firms as some foreign goods displace American products. However, Ricardo's model suggests that those losses are offset by additional benefits. In particular, the elimination of tariffs allows all consumers in the United States to buy foreign products at cheaper prices. This translates into more leftover money, or higher income, for all consumers. Finally, remember that the principle of comparative advantage implies that states should specialize in the production of a limited amount of goods in which they enjoy the highest level of production efficiency

According to lecture, why did OPEC fail to cut out supplies and drive up low global oil prices in the Fall of 2014? (42.3)

They hoped to let oil prices get so low that shale producers in the United States would go out of business. The Saudis hoped to reassert greater control over the market. If OPEC were to cut production, it would raise the price and allow US shale producers to stay in business.

What does it mean to be the indispensable nation? (Module 18)

To be the state that other states rely upon to lead the international system, especially in regards to solving crises and brokering agreements. --> In lecture we defined "indispensability" as something that is completely necessary. Here, to be the indispensable nation means to be the country upon which all the others in the international system have come to rely. In the current international system, many states wait for the US to take the lead in political negotiations (e.g. a nuclear deal with Iran) or in military endeavors (ISIS)

Which international organization was discussed as possessing effective enforcement capacity? A) United Nations B) League of Nations C) World Trade Organization D) Trans-Pacific Partnership (TPP) (31.2)

World Trade Organization ---> The World Trade Organization has enforcement capacity through its trade dispute panels that possess the capacity to impose trade penalties on offending states for violating their prior commitments for trade liberalization. The United Nations relies on its member states to enforce any resolutions it passes. The inability of the League of Nations to enforce its attempts to sanction its own members, like Italy in the 1930s, led to its demise