Global issues test 2

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

Bretton Woods system

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

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

Intrafirm trade:

Is when MNCs trade with their own affiliates in different countries, producing components and assembling products along their supply chain

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

Neoliberal structural adjustment programs call for (select all that apply, there are one to four possible correct answers): Opening economies to foreign trade and investment Selling state-owned enterprises State-owned enterprises to be sold to cronies of the political elite Import substitution

Opening economies to foreign trade and investment Selling state-owned enterprises

function of WTO

Organization designed to foster more open international trade and settle trade disputes

European colonial economic policies can be described as:

Mercantilist

In the United States (select all that apply, there are one to four possible correct answers): Micro-lending has focused on men, as opposed to women like in Bangladesh Micro-lending has been supplemented by NGOs that give out "micro-grants" Micro-lending failed because of fears of loan sharking Micro-lending has taken root through Grameen America and other organizations

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

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

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

What is Keynes' approach to stimulating a depressed economy?

More Government spending to increase aggregate demand

The Grameen Bank:

Offers loans to the poor in Bangladesh

Which statement below is INCORRECT:

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

The License Raj:

Was the Indian example of import substitution, with the government creating a lot of red tape (permits and licenses) to protect domestic industries

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?

Washing machines

Neopatrimonialism is:

When a ruler or ruling elites treat the state as an extension of their own personal property or interests

Where did the 1997 East Asian economic crisis begin?

Thailand

Manufacturing in Africa accounts for:

10 percent of GDP

How many people were forcibly removed from Africa as slaves during the 300+ years of Triangular Trade:

10-15 million

Under colonialism (select all that apply, there are one to four possible correct answers): Colonizing countries for centuries worked to develop local colonies, generally showing little progress because they lacked of political control A core dominant country generally controlled the political and economic lives of foreign peoples The U.S. and Russia benefited because of their vast networks of colonies Mercantilist trade policies by the colonized peoples frustrated the Triangular Trade

A core dominant country generally controlled the political and economic lives of foreign peoples

What was the gold standard?

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

A founding thinker for classical liberalism is:

Adam Smith

The first steps in opening the Chinese economy included (select all that apply, there are one to four possible correct answers): Instituting democratic governance to allow for political economic debate Adopting the U.S. dollar as its currency Allowing farmers to sell excess produce on the market, once they had sold a set amount to the state at planned prices Sending students overseas for training, particularly to the U.S.

Allowing farmers to sell excess produce on the market, once they had sold a set amount to the state at planned prices 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

Which of the following statements is true (select all that apply, there are one to four possible correct answers)? Latin American countries were the last to throw off the yoke of colonialism and gain independence Almost all the LDCs are former colonies and faced conquest, racism, and colonialist mercantilism prior to independence In 1945 there were 51 states in the newly created UN, and 142 newly sovereign states have joined since Of the 161 LDCs, 41 were former colonies

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

As a percentage of its national income/GNI, the U.S. gives what in foreign aid:

Amongst the lowest level among rich countries (bottom third)

East Asian states have pursued strategies that have included (select all that apply, there are one to four possible correct answers): Authoritarian force in the face of labor unrest Closing their markets to all international competition Eliminating the government's role in industrialization Strong investments in infrastructure and education

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

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

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

For people and countries to develop and prosper, they need:

Capital (money)

Marxists believe:

Capitalist systems are exploitative and empower the rich ("to be rich is to be born rich")

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

Why did the Japanese economy falter in the 1980s (select all that apply, there are one to four possible correct answers)? Close relationships between business, government, and bankers led to ill-advised bank loans and economic decisions, preventing the normal growth and contraction of markets The Japanese economy was flush with money and there were some questionable investment decisions, particularly in real estate 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 mode

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

Whirlpool claims its foreign competitors engage in unfair competition. What are examples in the video of what "unfair competition" means (select all that apply, there are one to four possible correct answers)? Companies getting direct funding (subsidies) from the government Consumers spending less on cheaper foreign products in a wave of nationalism 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

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

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

The "animal spirits" are:

Confidence and optimism in the economy, which sparks economic growth

What accelerated the slowing in China's rapid economic growth after almost two decades where growth often exceeded 10 percent per year?

Covid-19

Neoliberalism:

Criticized post-WWII Keynesian policies, instead promoting deregulation of business and less government intervention in the economy

Who initiated China's reform efforts that began a dramatic economic transformation?

Deng Xiaoping

While in the liberal tradition, Keynes argued that:

During economic downturns and crises, governments should intervene to stimulate employment and overall (aggregate) demand

The UNDP's Human Development Index (HDI) is based on three factors, including (select all that apply, there are one to four possible correct answers): Gender equality Educational attainment Access to health coverage Life expectancy

Educational attainment Life expectancy

The difference between foreign direct investment (FDI) and foreign portfolio investment (FPI) is that:

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

According to the most recent estimates (select all that apply, there are one to four possible correct answers): Gains in lifting people out of poverty worldwide are expected to reverse in the short term because of COVID-19 10% of the world's population live on less than $1.90 per day, down from 36% in 1990 Chinese citizens now enjoy higher per capita incomes than U.S. citizens Most of the gains in lifting people out of poverty have been in two countries, China and India (especially China)

Gains in lifting people out of poverty worldwide are expected to reverse in the short term because of COVID-19 10% of the world's population live on less than $1.90 per day, down from 36% in 1990 Most of the gains in lifting people out of poverty have been in two countries, China and India (especially China)

Mercantilists believe

Governments should regulate trade to advance national interests and power

Liberalism (select all that apply, there are one to four possible correct answers): Is synonymous with mercantilism Is a political economic idea centered on government ownership of the means of production Has a classical meaning tied to open markets driven by supply and demand, free trade, and the pursuit of individual self-interest Is an outdated philosophy based on protectionist trade strategies

Has a classical meaning tied to open markets driven by supply and demand, free trade, and the pursuit of individual self-interest

The primary role of IMF loans is to:

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

The OPEC driven oil price increases in the 1970s:

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 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 10% of the world's total wealth, while the top 1% held 25% In 2019 the bottom half of the world's population held less than 4% of the world's total wealth, while the top 1% held 55%

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%

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

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

One of the first and most common ways to measure development is:

Income per capita

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

Indonesia

With "structural adjustment" in Latin America:

Inflation has dropped dramatically and foreign investment has significantly increased

The World Bank is considered which type of actor?

International Governmental Organization (IGO)

Mexico and Brazil are noted for:

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

"Contemporary liberalism" (often associate economically with the ideas of John Maynard Keynes):

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

What is NOT true about Bolsa Familia?

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

Alexander Hamilton and Friedrich List pointed out:

It was easy for Great Britain to call for open markets and free trade after the country had used mercantilism to build a powerful economy

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

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

When did the Tiananmen Square massacre occur?

June 4, 1989

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

Large scale unemployment can develop in volatile markets Markets are inherently volatile

With import substitution industrialization (select all that apply, there are one to four possible correct answers): Latin American states had to rely on imported technology and parts, which became difficult to pay for Latin America saw some economic success between 1930 and 1960, particularly during the global economic expansion after WWII Local industries received favorable tariff protections, preferences in government contracts, and significant government investments Many "infant" industries became overstaffed and corrupt, producing inferior products because of a lack of competition

Latin American states had to rely on imported technology and parts, which became difficult to pay for Latin America saw some economic success between 1930 and 1960, particularly during the global economic expansion after WWII Local industries received favorable tariff protections, preferences in government contracts, and significant government investments Many "infant" industries became overstaffed and corrupt, producing inferior products because of a lack of competition

World Bank

Lender generally for longer term development projects around the world

Function of IMF

Lender of last resort for countries that experience significant but short term balance of payment problems

Examples of an "export promotion" techniques include (select all that apply, there are one to four possible correct answers): Low cost loans The Trump administration's 2018 tariffs on aluminum Protection of infant industries focused on exports Direct export subsidies

Low cost loans Protection of infant industries focused on exports Direct export subsidies

With the Great Depression:

Many Latin American leaders concluded that they should take forceful steps to encourage local production of manufactured goods

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): Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high tech imports needed for development 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 Classic liberal trade theory is seen as the only solution

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

IMF Structural Adjustment Programs (SAPs) have called for:

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

In Export Processing Zones (EPZs):

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

Colonies (select all that apply, there are one to four possible correct answers): Are today the source of much of the portfolio investment in MDCs Provided captive markets for the colonizer's exports Saw little impact on local political governance from colonizers, despite the economic changes Were often restructured by the dominant country to extract raw materials

Provided captive markets for the colonizer's exports Were often restructured by the dominant country to extract raw materials

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

Roughly 1%

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): Set prices and determined employment by assignment Sent production quotas and other targets to businesses and farms that had been nationalized or collectivized Adopted policies that led China to become impoverished and isolated Did not see exports as a central part of the development strategy

Set prices and determined employment by assignment Sent production quotas and other targets to businesses and farms that had been nationalized or collectivized Adopted policies that led China to become impoverished and isolated Did not see exports as a central part of the development strategy

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

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

Which countries were known as East Asia's "four tigers," following Japan with the export promotion strategy:

South Korea, Taiwan, Hong Kong, Singapore

Some downsides witnessed with structural adjustment programs in LDCs include (select all that apply, there are one to four possible correct answers): State-owned enterprises being sold to cronies of the political elite Political institutions being unable to enforce key parts of a free market economy, such as labor rights or environmental protections Privatized industries reducing employment as they seek to compete Reduced spending on education, healthcare, infrastructure and other public goods

State-owned enterprises being sold to cronies of the political elite Political institutions being unable to enforce key parts of a free market economy, such as labor rights or environmental protections Privatized industries reducing employment as they seek to compete Reduced spending on education, healthcare, infrastructure and other public goods

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

Protectionist steps countries can take include (select all that apply, there are one to four possible correct answers): Structural Adjustment Programs Subsidies Free Trade Agreements, such as NAFTA Bars on specific imports

Subsidies Bars on specific imports

Which is NOT one of the challenges China faces today?

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

Examples of significant economic downturns where states worked to manage capitalism and maintain "aggregate demand" include (select all that apply, there are one to four possible correct answers): The global economic expansion after WWII (1950s to 1970s) The Great Depression The Roaring 1920s The COVID-19 pandemic (2020- )

The Great Depression The COVID-19 pandemic (2020- )

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

The IMF

What is true about the Trans-Pacific Partnership (select all that apply, there are one to four possible correct answers)? The Trump administration pulled the U.S. out of the agreement upon coming to office 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 It excluded Japan and Vietnam, dooming its chances for effectiveness 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 signed by 11 countries to counter China's growing strength and help set the rules of the economic road along the Pacific Rim

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

The United States

During the 19th century (select all that apply, there are one to four possible correct answers): The industrial revolution in Europe helped spur demand for Latin America's primary product exports Much of Latin America was controlled by pirates The persistence of feudalism in Europe led to a significant economic boom in Latin America Latin America emerged as one of the world's most egalitarian regions after its wars for independence

The industrial revolution in Europe helped spur demand for Latin America's primary product exports

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

The market determines the price of the currency

As a result of the trade conflict over washing machines:

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)

In a scientific study of foreign aid in Ethiopia, researchers found:

There were significant gains for those that received the assistance in all major measures: revenues, savings, food consumption, and total assets

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

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

Karl Marx (select all that apply, there are one to four possible correct answers): Agreed with Adam Smith that markets should be run by the "invisible hand" Witnessed the grim working conditions and abject poverty of millions of workers during the industrial revolution Was in favor of imperialism, as he thought it set the groundwork for development in colonized countries Believed that governments in capitalist countries could not be trusted because the state would always defend wealthy interests

Witnessed the grim working conditions and abject poverty of millions of workers during the industrial revolution Believed that governments in capitalist countries could not be trusted because the state would always defend wealthy interests

Micro-lending tends to focus on:

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

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

World Trade Organization (WTO)