Global Issues Test 2
Liberalism (select all that apply, there are one to four possible correct answers): a Has a classical meaning tied to open markets¸ supply and demand¸ free trade¸ and the pursuit of individual self-interest b Is a political economic idea centered on government ownership of the means of production c Is synonymous with mercantilism d Is a term that has been used in the United States to refer to a preference for a more active state role in the economy e Is an outdated philosophy based on protectionist trade strategies
A and D
Floating exchange rates, which much of the world shifted to after 1971, differ from fixed exchange rates in that with floating exchange rates: a The market determines the price of the currency Your answer b The government decides the value of the currency c The currency only shifts upon World Bank mandates, called "floats" d The U.S. dollar or the European euro must be used in the transaction e Protectionism is more apparent, as the state manipulates currency values
a
If the Ukraine war was to end today, a It would take a significant amount of time and investment to bring Ukraine to its prewar levels of agricultural productivity Your answer b Ukraine could very quickly fill global shortages in food c Gas prices in U.S. and European gas stations would drop quickly and significantly as the United States and Europe have pledged to resume their oil imports from Russia d Renewed steel production in Ukraine could help alleviate a global food crisis e Russian farmers could get out from under the total ban on Russian food exports in global markets
a
Manufacturing in Africa accounts for: a 10 percent of GDP Your answer b 30 percent of GDP c 52 percent of GDP d 70 percent of GDP e 76.1 percent of GDP
a
The License Raj: a Was the Indian example of import substitution, with the government creating a lot of red tape (permits and licenses) to protect domestic industries Your answer b Was the Indian example of structural adjustment, with the government liberalizing governmental regulations c Was the opposite of the middle-income trap for India, with the government avoiding the challenges found in Latin America d Is an example of how the Indian government has avoided the corruption found in Latin America through efficient administration e Is a liberalizing trade deal between India and the United States signed between Prime Minister Modi and President Biden
a
According to Keynes (as discussed by his biographer Robert Skidelsky), volatile markets can punish: a Millions in society, for the mistakes of a few, causing social unrest Your answer b Only those who have made mistakes, showing market efficiency c Military planners, who must embrace volatile social reactions d College students and professors, who must address low prices and high wages e The environment, because regulations tend to strengthen
a Millions in society, for the mistakes of a few, causing social unrest
In a socialist system (select all that apply, there are one to four possible correct answers): a The state owns and controls key means of production b Most of the economy is privately held, and the government is a weak watchdog c Capitalism is found mostly in import substituting zones or rural areas d Governments regulate through low tariffs, but often keep floating exchange rates e Countries try to become dependent on a few products
a The state owns and controls key means of production
Colonies (select all that apply, there are one to four possible correct answers): a Were often restructured by the dominant country to extract raw materials b Are today the source of much of the portfolio investment in MDCs c Saw little impact on local political governance from colonizers¸ despite the economic changes d Provided captive markets for the colonizer's exports e Were finally abolished after WWI by President Woodrow Wilson
a and d
MNCs build supply chains to (select all that apply, there are one to four possible correct answers): a Find the most qualified and inexpensive labor Your answer b Press states to adopt mercantilist practices c Access foreign markets Your answer d Access abundant raw materials Your answer e Lobby states to adopt social welfare programs and protect workers' rights
a,c,d
According to the most recent estimates (select all that apply, there are one to four possible correct answers): a 10% of the world's population lives on less than $1.90 per day¸ down from 36% in 1990 Your answer b The United States accounted for 62% of all global wealth in 2020 c Gains in lifting people out of poverty worldwide are expected to reverse in the short term because of COVID-19 Your answer d 36% of the world's population live on less than $1.90 per day¸ up from 10% in 1990 e Most of the gains in lifting people out of poverty have been in two countries¸ China and India¸ especially China Your answer f Chinese citizens now enjoy higher per capita incomes than U.S. citizens
a,c,e
As noted in the PBS video, with the efforts toward deregulation/liberalization of agriculture in India, many farmers (select all that apply, there are one to four possible correct answers): a Feared business conglomerates¸ like the Reliance group¸ would now take over agriculture and put small farmers out of business b Believed they would flourish because India's agriculture sector is highly efficient and only held back by outdated government rules c Appreciated that they were consulted at every step of the process¸ and that the country has a strong safety net and ample manufacturing jobs to assist in the transition d Accused Prime Minister Modi of doing the bidding of wealthy industrialists e Thought they would "get wiped out¸" as reforms came to a sector that is "widely seen as costly and inefficient¸ with outdated infrastructure"
a,d,e
Which of the following is true (select all that apply, there are one to four possible correct answers)? a Iron ore and semi-finished iron are Ukraine's single largest export Your answer b Ukraine has never been a major steel producer¸ but the United States is now assisting in developing this industry c Ukrainian workers have shifted to working in armaments factories in Odessa¸ sparking a decline in Ukraine's steel production d The war has cut Ukraine's steel production in half Your answer e Russia has blocked traditional export routes out of Ukraine
a,d,e
Which of the following is true about global markets and food (select all that apply, there are one to four possible correct answers)? a Ukraine grows enough food to feed 400 million people Your answer b The drop in Ukrainian food exports has been fully filled by donations from U.S. midwestern farmers¸ the most generous private charity efforts in world history c Ukraine has stolen Russian crops to make up for losses from its bombed-out farms d Ukraine and Russia together account for one-third of the world's wheat exports Your answer e Russia's invasion and its blockade of Ukrainian ports have prevented Ukraine from exporting its grain Your answer
a,d,e
What steps have the Russians taken with respect to food production in Ukraine (select all that apply, there are one to four possible correct answers)? a They have targeted agricultural infrastructure in their attacks¸ including silos and the railroad bridges Ukraine needs to export b They have offered financial support to Ukrainian farmers in the hopes of getting them to support the Russian invasion c They have fully allowed farm exports to continue during the war¸ given the dire implications for food insecure countries d They have shelled farms with high-explosive projectiles¸ leaving piglets and calves screaming as they were roasted alive e They have fired at farmers and tractors f They have stolen Ukrainian crops
a,d,e,f
Keynes biographer (Robert Skidelsky) sums up Keynes with three ideas, including (select all that apply, there are one to four possible correct answers) a Markets are inherently volatile Your answer b Depressions show that bureaucrats rely on too much regulation and government spending c The volatility in markets is healthy for an economy and states should work against "aggregate demand" d Private spending needs to replace public spending to correct market imperfections in a depressed economy e Large-scale unemployment can develop in volatile markets Your answer f 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 Your answer g There are political downsides (even including revolution) if states take steps to address severe economic downslides
a,e,f
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): a Life expectancy Your answer b Access to health coverage c Legal protections for workers d Gender equality e Per capita income Your answer f Educational attainment
a,e,f
Capital (select all that apply, there are one to four possible correct answers): a In the past¸ largely stayed at home¸ in domestic banks and stock markets Your answer b Today crosses borders at lightning speed¸ with over $6 trillion traded every day Your answer c Can be in the form of foreign direct investment¸ foreign portfolio investment¸ foreign aid¸ and remittances from migrants sending money back home Your answer d Is another word for money
all
Examples of an "export promotion" techniques include (select all that apply, there are one to four possible correct answers): a Direct export subsidies Your answer b Low-cost loans Your answer c Undervalued exchange rates Your answer d Protection of infant industries focused on exports
all
FDI can often help a country by (select all that apply, there are one to four possible correct answers): a Increasing competition in a host country¸ making its industries more efficient b Generating employment and economic growth in host countries c Helping build physical infrastructure in a host country d Bringing in new technology and upgrading local labor skills
all
Some downsides seen with structural adjustment programs in LDCs include (select all that apply, there are one to FIVE possible correct answers): a State-owned enterprises being sold to cronies of the political elite Your answer b Privatized industries reducing employment as they seek to compete Your answer c Small business owners being overwhelmed by international competition Your answer d Reduced spending on education¸ healthcare¸ infrastructure¸ and other public goods Your answer e Political institutions being unable to enforce key parts of a free market economy¸ such as labor rights or environmental protections
all
What is true about the international oil trade (select all that apply, there are one to four possible correct answers)? a India traditionally has not purchased significant amounts of Russian oil¸ because of the distance between Russian ports and India b After the United States and Europeans levied heavy sanctions¸ Russian oil has been flowing to China and India at a discounted price c Russia has received more oil revenue than ever before d EU countries continue to receive significant energy supplies from Russia¸ though stiff measures have been put in place and a full ban is proposed
all
With import substitution industrialization (select all that apply, there are one to SIX possible correct answers): a States built "infant¸" often state-owned industries which manufactured products to substitute for foreign imports Your answer b Local industries received favorable tariff protections¸ preferences in government contracts¸ and significant government investments Your answer c Latin America saw some economic success between 1930 and 1960¸ particularly during the global economic expansion after WWII Your answer d Latin American states had to rely on imported technology and parts¸ which became difficult to pay for Your answer e Latin American countries eventually became dependent on overvalued exchange rates¸ debt¸ and printing money Your answer f Many "infant" industries became overstaffed and corrupt¸ producing inferior products because of a lack of competition
all
Arguments in favor of protectionist policies include: a These policies are essential to absolute advantage as outlined by Smith b Countries can temporarily support the growth of infant industries to reshape their comparative advantage Your answer c Elites do not benefit from protectionism and hence it is a steppingstone to liberal economics d Protectionism is clear in the core distinction between absolute and comparative advantage e The significant success of the European Union, which was founded on socialist policies
b
Mercantilist approaches to industrialization, seeking to establish desired trade balances and trade profiles, include: a Adopting IMF Structural Adjustment Programs, which emphasize closed market strategies b Promoting exports and protecting the economy by restricting imports Your answer c Eliminating Non-tariff Barriers (NTBs) d Programs initiated by the Washington Consensus to adopt Free Trade Agreements (FTAs) e Promoting all imports while restricting exports f Engaging in capital flows through U.S. Treasury bills
b
One of the first and most common ways to measure development is: a Racism b Income per capita Your answer c Taxes d Happiness e Obesity levels
b
The Bretton Woods institutions were created after WWII: a To allow the United States to dominate the world economy b To promote stability in international economics and, hence, strengthen international peace Your answer c As the founding institutions of the European Union d To complete the Doha Round e To imbed socialism at the international level
b
To stabilize currencies during the initial post-WWII era, countries: a Actively devalued their currencies in a mercantilist effort to increase their trade balances b Fixed (or pegged) the value of their currency to the U.S. dollar, which was fixed to the price of gold Your answer c Adopted the U.S. dollar or European euro as their local currency d Abolished the IMF and created the World Bank e Discouraged Free Trade Agreements, such as NAFTA
b
"Contemporary liberalism" (often associate economically with the ideas of John Maynard Keynes): a Is the main point of socialism as outlined by Marx b 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" c Is focused on the use of significantly less government spending to stimulate aggregate supply, with states privatizing key industries d Is the same as the "neoliberalism" promoted by Ronald Reagan e Is synonymous with Adam Smith's "invisible hand"
b 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"
East Asian states have pursued strategies that have included (select all that apply, there are one to four possible correct answers): a Closing their markets to all international competition b Authoritarian force in the face of labor unrest c Strong investments in infrastructure and education d Eliminating the government's role in industrialization e Withdrawing from the IMF and World Bank because of the 1997 East Asian economic crisis
b,c
Which of the following is TRUE (select all that apply, there are one to four possible correct answers)? a 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% b 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% Your answer c 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% d 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% Your answer e 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%
b,d
What is true about the Trans-Pacific Partnership (select all that apply, there are one to four possible correct answers)? a It excluded Japan and Vietnam¸ dooming its chances for effectiveness b After going into force in 2012¸ it led to Japan passing China as East Asia's largest economy c The Trump administration pulled the United States out of the agreement upon coming to office d It was hotly disputed by both the left and right wings of the U.S. political spectrum e 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
c,d,e
According to the reading, which statement below is INCORRECT? a Ten of the top 11 countries in "organized crime" are in Latin America 22.8% of people in Botswana age 15-49 have HIV b Only 15.5% of people in India have access to improved drinking water c Twenty-five of the top 30 countries with the lowest GDP per capita are in Africa d Twenty-five of the bottom 32 countries in infrastructure are in Latin America Your answer e China and India are both in the top five countries with "missing women"
d
Classical liberal trade theory holds the view that: a Too much dependence on trade should be discouraged because it leads to dependence on foreign economies and governments and therefore a loss of sovereignty b Governments should not hesitate to intervene in controlling international trade if it is necessary to protect domestic jobs and industries c Governments should continually protect their infant industries with trade barriers so that they can become competitive in the international arena d Free trade without governmental interference will eventually benefit all economies in the international system by ensuring efficiency in the production and distribution of goods and services Your answer e Karl Marx was incorrect in arguing that countries have comparative advantages
d
Developing countries (LDCs) often face "declining terms of trade" because: a LDC agricultural crops often cause health problems b MNCs will not invest in LDCs c The capital generated through exports (often finished products) exceeds the capital they spend on imports (generally agricultural and other primary goods) d Their exports (often agricultural goods or other primary products) often do not bring in enough capital to pay for their imports (often finished goods) Your answer e The IMF and World Bank strongly discourage them from benefitting from their comparative advantages, pushing them instead to industrialize through protected industries f IMF conditionality has led to a loss of their comparative advantage
d
In export processing zones (EPZs): a Products are assembled with duty-free imported parts, but export taxes keep the products from being exported b Bureaucratic red tape undermines the export promotion strategy c High tariffs allow for the time it takes to build efficient industries d Products are assembled with duty-free imported parts and then exported Your answer e Maquiladoras exist in tariff-protected enclaves
d
Intrafirm trade: a Is central to understanding Ricardo's critique of Smith, and the foundation of absolute advantage b Is the collusion of elites within an MNC, leading to "intrafirm inequality" c Was argued by David Ricardo as incompatible with comparative advantage d Is when MNCs trade with their own affiliates in different countries, producing components and assembling products along their supply chain Your answer e Does not count in global trade statistics, leading many to call for higher corporate taxes
d
Neoliberal advocates of the "Washington Consensus" argue that: a Europe has the responsibility to give assistance to the poorer countries since it was primarily b The effects of colonialism necessitate that LDCs need to protect their economies from Western influences c The World Bank should offer vast loans to developing countries as reparation for colonial exploitation d Opening economies to free trade, cutting back state budgets (fiscal responsibility) and privatizing state-owned enterprises is the best strategy for the developing world Your answer e Europeans that had undermined their economies f The United States should dictate sensible policies to poorer countries to help them develop
d
Neopatrimonialism is: How Rwanda has shown a remarkable recovery since the genocide in the late 1990s b The predominance of male leaders in Africa during the twenty-first century c An extension of IMF structural adjustment programs in Africa d When a ruler or ruling elites treat the state as an extension of their own personal property or interests Your answer e How Mauritius has increased incomes by 600 percent since independence
d
The "animal spirits" are: a Government officials overspending during depressions, causing unnecessary waste b Predatory capitalists which cause recessions and depressions c Politicians' abilities to maintain "aggregate demand" d Confidence and optimism in the economy, which sparks economic growth Your answer e The "sticky wages" that end depressions
d Confidence and optimism in the economy, which sparks economic growth
One criticism of state efforts to attract international capital is that it can lead to: a Democratization b WTO violations by corrupt MNCs c A "race to the bottom," with countries lowering labor and environmental standards to competeWTO violations by corrupt MNCs Your answer d An affirmation of socialist theory e Long-term shifts in comparative advantage, leading to absolute advantages by MNCs f The rise of populist leaders calling for stronger structural adjustment programs
c
Proponents of free trade argue: a "Transition costs" do not exist in low-skilled areas where there is a comparative advantage b While employment generally declines because of trade, higher corporate profits lead to added demand by the wealthy c Trade increases overall employment and growth, and can shift jobs to where a country has comparative advantages Your answer d "Transition costs" only exist in high-skilled areas where there is a comparative advantage e Workers are overrepresented in most democracies
c
Those that caution against free trade generally argue: a Countries can be forced to significantly strengthen (raise) their environmental and labor standards to compete with countries where these standards are lower b Countries should try to become dependent on a few agricultural products c Free trade leads to competition which can cost workers their jobs Your answer d Free trade can lead to functionalism, neo-functionalism, and war e Capitalism always trumps more open trade
c
Why is trade policy "inevitably politicized"? a Prices are generally higher through FTAs (such as NAFTA), but can be lower with protectionist policies b Governments use mercantilist policies to make sure trade is free, open, and "win-win" c There are winners and losers with trade policies, and groups pressure governments to adopt policies beneficial to them Your answer d Politicians stand to gain significantly if they adopt FTAs, but lose significantly if they shift to protectionism e Because it is always easy for voters to understand trade policy
c
With the 1997 East Asian economic crisis, in which country did IMF-recommended belt tightening measures lead to open rebellion and many deaths? a Taiwan b South Korea c Indonesia Your answer d Philippines e Japan
c
What was the gold standard? a The Chinese desire for superior opium (known as "golden opium") b The British Navy, known as the "gold standard" on the high seas c A fixed exchange rate system that set each country's currency values in terms of gold, facilitating trade and investment d Brazil's ending of slavery in 1888, which was undertaken after huge British investments
c A fixed exchange rate system that set each country's currency values in terms of gold, facilitating trade and investment
What is Keynes' approach to stimulating a depressed economy? a Cutbacks in public spending to decrease deficits and improve efficiency b Privatization of public enterprises to improve efficiency c More government spending to increase aggregate demand Your answer d Free trade agreements to open markets for local businesses e Cutbacks in government regulation to allow the "invisible hand" to allocate resources more efficiently
c More government spending to increase aggregate demand
The stimulus spending during the "Great Recession" in the United States was based on the ideas of: a Adam Smith b Friedrich Hayek c John Maynard Keynes Your answer d Karl Marx e Ronald Reagan f Alan Greenspan
c John Maynard Keynes
The WTO (select all that apply, there are one to four possible correct answers): a Has been shut down because of criticisms from the left and right b Has been replaced by the GATT¸ which has lessened trade disputes considerably c Is criticized on the left for its alleged disregard for environmental and worker standards Your answer d Is criticized on the right for its ability to impinge on the decisions of sovereign states Your answer e Is controlled by the UN Security Council¸ leading to gridlock in the process
c,d
What are the 3 most common economic systems?
Free market, Command and Mixed
European colonial economic policies can be described as: a Mercantilist b Classical liberal c Socialist d Contemporary liberal e Neoliberal
a Mercantilist
Which country pulled out of the Trans-Pacific Partnership (TPP)?
The United States
The difference between foreign direct investment (FDI) and foreign portfolio investment (FPI) is that: a FDI is investing more in fixed assets (companies and real estate), as opposed to stocks and bonds (which is portfolio investment) Your answer b FDI by MNCs has been virtually non-existent to date, while foreign portfolio investment by NGOs has made a tremendous impact c There is no difference; these terms mean the same thing d FDI has collapsed in the post-WWII era (to the point of inconsequence), while portfolio investment has soared e FDI is solely undertaken by states, whereas portfolio investment is primarily undertaken by NGOs
a
The idea of comparative advantage is that: a States should specialize in producing the goods which they produce most efficiently and trade for goods that other states produce most efficiently Your answer b Trade always has winners and losers, so countries should pursue mercantilist, closed market strategies to gain an absolute advantage c Countries should impose advantages in certain areas through protectionist policies d The United States has more advantages because of its regulatory power and it should exploit them by enforcing nationalist policies e Developing countries had advantages in industrialization, but they were overtaken by colonialism f If you have nukes, why not use them, this step will allow you to impose a stable world economy
a
The removal or reduction of tariffs or quotas on the trading of specific goods to stimulate freer trade is known as: a Trade liberalization Your answer b Fiscal stimulus c Neo-mercantilism d Mercantilism e Socialism
a
A founding thinker for classical liberalism is: a Adam Smith b Karl Marx c Niccolò Machiavelli d Franklin Roosevelt e Donald Trump
a Adam Smith
While associated with the liberal tradition, Keynes argued that: a During economic downturns and crises, governments should intervene to stimulate employment and overall (aggregate) demand b Socialism was needed to improve upon the outcomes of mercantilism and protectionism c Liberalism would never work unless countries gave up their militaries and banned war d Countries should robustly use the strategies of all ideas, including communism e LDCs had no option but to use socialism
a During economic downturns and crises, governments should intervene to stimulate employment and overall (aggregate) demand
Mercantilists (economic nationalists) believe: a Governments should regulate trade to advance national interests and power b All trade should be shut off and the state should be self-sufficient c Mercantile exchanges should not include agricultural goods d Trade should be completely unregulated/free
a Governments should regulate trade to advance national interests and power
The primary role of IMF loans is to: a Help stabilize a country's economy when the country has severe budgetary imbalances b Provide a guiding hand to the Security Council in matters of peacekeeping c Provide loans for democratization in developed countries d Assist countries pursuing import substitution industrialization through high tariff promotion e Lessen World Bank influence in developing countries f Foster socialist systems in LDCs (which is why it was abolished during the Reagan era)
a Help stabilize a country's economy when the country has severe budgetary imbalances
The World Bank is considered which type of actor? a International governmental organization (IGO) b Multinational corporation (MNC) c Non-governmental organization (NGO) d International advocacy group (IAG) e More-developed country (MDC)
a International governmental organization (IGO)
Alexander Hamilton and Friedrich List pointed out: a 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 b Great Britain's development into the world's most powerful economy proves the liberal arguments of Adam Smith c WWI, WWII, and the Great Depression strengthened the case for laissez-faire capitalism d Marxists were correct in their focus on the exploitation of mercantilism and capitalism, but they didn't go far enough in their critique of private business e Germany and the United States were generally the most liberal economies in the nineteenth century, not Great Britain
a 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
Karl Marx (select all that apply, there are one to four possible correct answers): a Witnessed the grim working conditions and abject poverty of millions of workers during the industrial revolution b Agreed with Adam Smith that markets should be run by the "invisible hand" c Was in favor of imperialism¸ as he thought it set the groundwork for development in colonized countries d Believed that governments in capitalist countries could not be trusted because the state would always defend wealthy interests e Moved to the United States after his ideas were rejected in Europe¸ running for Congress in 1812
a and d
What's an economic system?
a way that is used by a society to determine how to allocate scarce resources. furthemore it helps us answer the 3 important economic question : what, how and for whom to produce
Under the GATT (select all that apply, there are one to four possible correct answers): a States agreed to lower their tariffs and apply the same tariff rate to all members of the GATT (known as the most-favored nation system) b Average global tariffs were lowered from 22% to 5% over roughly 50 years c All relevant issues for liberalizing trade were undertaken¸ including protecting intellectual property rights and regulating banking and insurance d Countries often shifted to new steps to protect their economies¸ such as by using non-tariff barriers e Developing countries (LDCs) took control of international trade negotiations in 1962 given the overwhelming number of new states
a,b,d
Arguments in favor of free trade often include each of the following (select all that apply, there are one to four possible correct answers): a Free trade promotes interdependence among countries and helps maintain international peace Your answer b Everyone benefits when countries produce and sell what they do most efficiently Your answer c Countries can use trade barriers to better protect state owned enterprises (SOEs) under free trade policies d Infant industries are the only industries where open markets are effective e Open trade fosters lower prices for consumers Your answer f Free trade produces overall economic growth and jobs in sectors where the country has a comparative advantage
a,b,e,f
Neoliberal structural adjustment programs call for (select all that apply, there are one to four possible correct answers): a Opening economies to foreign trade and investment Your answer b Reducing government spending Your answer c The middle-income trap d State-owned enterprises to be sold to cronies of the political elite e Import substitution f Selling state-owned enterprises Your answer g Relaxing government controls on currency and interest rates
a,b,f,g
Protectionist steps countries can take include (select all that apply, there are one to four possible correct answers): a Tariffs (taxes on imports) Your answer b Business regulations and licenses Your answer c Geographic barriers¸ such as rivers Your answer d Free Trade Agreements¸ such as NAFTA e IMF/World Bank "conditionalities" f Structural Adjustment Programs g Subsidies Your answer h Bars on specific imports Your answer i Quotas
a,b,g,h,i
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): a Classical liberal arguments for open markets and free trade can be viewed with suspicion Your answer b Classic liberal trade theory is seen as the only solution c Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high-tech imports needed for development Your answer d Trade deficits do not develop because they have a monopoly over their competition e South Korea's vast natural resource base provides a model for the best strategy of development
a,c
Which of the following is true about Russian oil sales (select all that apply, there are one to four possible correct answers)? a Russian oil company Lukoil refines oil in Italy¸ which has allowed it to evade U.S. sanctions and sell oil into the U.S. market Your answer b The United States has received no Russian oil since it enacted a ban in 2021¸ but it has received petroleum jelly products c At the start of 2022¸ Russia supplied less than 2% of India's oil imports¸ but it is now on course to become its largest single supplier Your answer d The EU has enacted a total ban on all Russian energy supplies¸ but there is a carve out for the United Kingdom e Italian firm Fiatoil has worked with the mafia to evade sanctions and sell Russian oil into the U.S. market
a,c
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): a The Great Depression b The global economic expansion after WWII (1950s to 1970s) c The COVID-19 pandemic (2020-) d The Roaring 1920s e The Great Recession (2008-009)
a,c and e
Under colonialism (select all that apply, there are one to four possible correct answers): a A core dominant country generally controlled the political and economic lives of foreign peoples b The United States and Russia benefitted because of their vast networks of colonies c Significant wealth and resources typically flowed out of the colonies¸ with relatively little capital flowing back in d Colonizing countries for centuries worked to develop local colonies¸ generally showing little progress because they lacked political control e Mercantilist trade policies by the colonized peoples frustrated the Triangular Trade f Asian dominance in the Triangular Trade led to the colonization of China g Colonies provided cheap labor and resources¸ and served as markets for the colonizer's goods
a,c and g
During the nineteenth century (select all that apply, there are one to four possible correct answers): a The industrial revolution in Europe helped spur demand for Latin America's primary product exports Your answer b Latin America emerged as one of the world's most egalitarian regions after its wars for independence c The vast majority of people in Latin America suffered from the realities of the transatlantic economy and the liberal economic mantra of the time Your answer d Latin American elites benefitted from high demand for the region's mining and agricultural exports¸ buying manufactured products and luxury goods Your answer e Much of Latin America was controlled by pirates f The persistence of feudalism in Europe led to a significant economic boom in Latin America
a,c,d
Which of the following statements is TRUE (select all that apply, there are one to four possible correct answers)? a In 1945 there were 92 states in the newly created United Nations¸ and 101 newly sovereign states have joined since b Almost all the LDCs are former colonies and faced conquest¸ racism¸ and colonialist mercantilism prior to independence Your answer c Latin American countries were the last to throw off the yoke of colonialism and gain independence d In 1945 there were 51 states in the newly created United Nations¸ and 142 newly sovereign states have joined since Your answer e Of the 161 LDCs¸ 41 were former colonies
b,d
Why did the Japanese economy falter in the 1980s (select all that apply, there are one to four possible correct answers)? a China overtook Japan as the United States' major trading partner¸ undermining Japanese businesses and the developmental state model b Close relationships between business¸ government¸ and bankers led to ill-advised bank loans and economic decisions¸ preventing the normal growth and contraction of markets c The U.S.-Japanese Free Trade Agreement was ended¸ closing off Japan's access to U.S. consumers d The Japanese economy was flush with money and there were some questionable investment decisions¸ particularly in real estate e Japan's strongly overvalued yen undermined its imports
b,d
For people and countries to develop and prosper, they need: a Authoritarian governments that can dictate policies without popular interference b More land than other people or countries c Capital (money) Your answer d Free market systems without any government involvement in the economy or private capital e Less foreign direct investment (FDI) and fully protected domestic economies f To focus fully on the production of agricultural goods g Charismatic leaders focused on protecting their country's economy from foreign goods
c
IMF Structural Adjustment Programs (SAPs) have called for: a Trade protectionism to shield infant industries b Large stimulus packages and increased government spending c Privatization (sale to private owners) of state-owned enterprises (SOEs) Your answer d Mercantilist oriented regulation in developing economies because of high poverty rates e Socialist practices, which is why they have been rejected by the "Washington Consensus"
c
Losing a case through the WTO disputes settlement mechanism could lead a country to face: a Military force b Being forced to rewrite laws declared unconstitutional by the WTO c Economic sanctions from the winning state Your answer d A full trade embargo by the United States e Removal from the European Union
c
With which country did the United States sign a free trade agreement in 2007 (coming to force in 2012), adding transparency and openness to their relationship? a Indonesia b Japan c China d South Korea Your answer e Thailand f Philippines
d
The OPEC-driven oil price increases in the 1970s: a Prompted the Washington Consensus to call for import substitution in Latin America, eventually leading to structural adjustment b Led to oil producers in Latin America initiating structural adjustment programs in the Southern Cone c Sparked significant economic growth in the 1980s in Latin America d 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 Your answer e Fostered deeper ties between Latin America and East Asia, especially China
d
The creation of the WTO in 1995 included: a All countries except the BRICS countries, because of illegal mercantilist practices b Disregard for the GATT agreements, restarting the liberalization of trade from scratch c Only the top 20 global economies (the G-20), but it still covered more than 30% of global trade d The creation of a trade dispute settlement mechanism with teeth, to resolve trade disputes amongst members Your answer e A weak mechanism to settle trade disputes, under which no penalties ever come about and cheating is flaunted
d
Through _________________, the IMF and World Bank set a series of often stiff conditions when establishing an agreement with a borrowing country, pressing such steps as trade liberalization, fiscal responsibility, and privatization. a Foreign aid b The GATT c Declining Terms of Trade Agreements d Structural Adjustment Programs Your answer e The European Union
d
What point is made about Russian food production? a Russia produces large amounts of sugar, but has now shifted to processed foods because of a lack of Western imports b It has dropped dramatically because of the global ban on Russian food exports c Russia produces very little food, instead relying on Ukraine d Western countries have very deliberately not sanctioned Russia's food and fertilizer exports for global food security reasons Your answer e Russia has greatly curtailed its food production as it has shifted to producing more armaments
d
Which countries were known as East Asia's "four tigers," following Japan with the export promotion strategy: a Taiwan, China, Vietnam, Thailand b Japan, South Korea, China, Thailand c Taiwan, South Korea, Indonesia, Thailand d South Korea, Taiwan, Hong Kong, Singapore Your answer e Taiwan, South Korea, Vietnam, Indonesia
d
Which country was at the head of East Asia's "flying geese"? a Singapore b China c South Korea d Japan Your answer e Taiwan
d
Which two thinkers are most closely associated with setting the classical liberal roots of open markets and free trade? a Adam Smith and John Maynard Keynes b Adam Smith and Karl Marx c David Ricardo and John Maynard Keynes d Adam Smith and David Ricardo Your answer e Karl Marx and David Ricardo f Karl Marx and John Maynard Keynes
d
With "structural adjustment" in Latin America: a Chile has been the biggest loser, showing negative growth for almost 20 years b The poor have been the biggest winners, with inequality significantly lessening c No MNCs have matured into powerful global firms d Inflation has dropped dramatically, and foreign investment has significantly increased Your answer e All Latin American countries have embraced a new strategy, the middle-income trap
d
With the Great Depression: a Latin American countries shifted their trade focus to Africa and East Asia, which did not suffer from the sharp economic downturn b Demand for Latin America's primary products skyrocketed c Intellectuals strongly supported Latin America's reliance on primary products d Many Latin American leaders concluded that they should take forceful steps to encourage local production of manufactured goods Your answer e European immigrants fled from Latin America and returned home f Latin America became a manufacturing powerhouse
d
Marxists believe: a All governments possess the same ability to eliminate markets, but many refuse to do so b Capitalism will evolve from socialism ("socialists will shine the light on open markets") c The only viable strategy for the state is liberalism ("self-interest is the only alternative") d Capitalist systems are exploitative and empower the rich ("to be rich is to be born rich") e Communist states, such North Korea, have been highly successful and continue to show the superiority of this lens
d Capitalist systems are exploitative and empower the rich ("to be rich is to be born rich")
Neoliberalism: a Was rejected by Ronald Reagan in favor of "America First" economic policies b Is the new form of liberalism promoted by John Maynard Keynes c Is the merging of socialist and liberal ideas in Scandinavian countries, which has led to significant social welfare d Criticized post-WWII Keynesian policies, instead promoting deregulation of business and less government intervention in the economy e Rejected the Washington Consensus policies of the IMF in favor of increased banking deregulation
d Criticized post-WWII Keynesian policies, instead promoting deregulation of business and less government intervention in the economy
The liberal world economic order sought by the United States and other Western countries after WWII was based on: a Socialism, to provide for the general welfare of people equally b Heightened protectionism to stabilize the international economic system c Mercantilist policies based on the ideas of Franklin Roosevelt d Open markets, freer trade, and free flowing capital with some governmental management e Confused ideas because the Western countries could not agree on a vision
d Open markets, freer trade, and free flowing capital with some governmental management
The General Agreement on Tariffs and Trade (GATT) was the precursor to the: a International Monetary Fund (IMF) b European Union (EU) c North Atlantic Treaty Organization (NATO) d World Trade Organization (WTO) e United Nations (UN) f North American Free Trade Agreement (NAFTA)
d World Trade Organization (WTO)
The middle-income trap: a Is why inflation dropped significantly in Latin America, and FDI increased b Is the newest strategy undertaken in Latin America, focusing on the middle class c Has not been seen in Latin America, but is highly prevalent in Africa d Is the same as the License Raj in India, sparking a dramatic rise in the country's middle class e Is when countries are not able to reach higher income levels because they are held back by weak/corrupt institutions, poor infrastructure, sharp inequality, and other challenges You
e
Where did the 1997 East Asian economic crisis begin? a Taiwan b Japan c South Korea d China e Thailand
e
How many people were forcibly removed from Africa as slaves during the 300+ years of Triangular Trade? a 1-2 million b 1.2 billion c 45-60 million d 250,000-500,000 e 10-15 million
e 10-15 million
The World Bank and the IMF are part of what post-World War II system? a Cold War system b WTO alliance c Global Insurance system d Basel Convention on Banking (BCB) e Bretton Woods system f New Triangular Trade Alliance (NTTA)
e Bretton Woods system
In the post-WWII era, the Scandinavian countries: a Used significant military spending to strengthen their economies and stimulate aggregate demand b Were at the forefront of the international economy, surpassing even the United States in aggregate GDP c Joined the communist bloc, allying closely with China and the Soviet Union d Were by far the most liberal, rejecting state involvement in the economy and pressing for unfettered markets e Joined liberal international economic institutions, but have also owned some industries and often provided generous safety nets
e Joined liberal international economic institutions, but have also owned some industries and often provided generous safety nets
Mercantilism includes (select all that apply, there are one to four possible correct answers): a The philosophy that countries should be fully open to both FDI and portfolio investment b Agricultural production, as seen in many LDCs c Free market economics, which was advocated by opponents to colonialism d The philosophy of slavery opponents, who decried the searing human rights abuses e States controlling trade, generally protecting home markets while seeking to sell products abroad f The same arguments as socialism
e States controlling trade, generally protecting home markets while seeking to sell products abroad
What international organization did John Maynard Keynes help create in the aftermath of the Great Depression? a The Group of 7 (G-7) b The Group of 20 (G-20) c NATO d The U.S. Federal Reserve e The IMF Your answer f The European Union
e the IMF
