Question 1

Which economic phenomena led to the questioning of traditional Keynesianism?&#10;A) Inflation&#10;B) Stagflation&#10;C) Unemployment&#10;D) Deflation

Accepted Answer

The phenomenon of stagflation, which is a combination of high inflation and high unemployment, in the 1970s led to the questioning of traditional Keynesianism. The theory's assumption that inflation and unemployment were inversely related, i.e., a tradeoff between the two, was challenged by the observation of both rising together, which was not predicted by the theory.

Question 2

Which negative effects of the welfare state were discussed after the breakdown of the Bretton Woods system? Please select all that apply.&#10;A) Negative impact on economic growth.&#10;B) Structural unemployment.&#10;C) Political instability.&#10;D) Erosion of social capital.

Accepted Answer

The negative effects of the welfare state that were discussed after the breakdown of the Bretton Woods system include:A) Negative impact on economic growth.B) Structural unemployment.

Question 3

What can be said about varieties of capitalism theory? Please select all that apply.&#10;A) The varieties of capitalism theory depict an ideal type of a welfare state.&#10;B) Within the varieties of capitalism theory, the welfare state is seen as a functionalist response to capitalism.&#10;C) Within the varieties of capitalism theory, the welfare state is seen as the result of political conflicts.&#10;D) Within the varieties of capitalism theory, the welfare state is seen as the result of a workers-employers conflict.

Accepted Answer

A,B

Question 4

Conservative welfare regimes aim at securing income replacement. Payments are dependent on contribution records. Liberal welfare regimes aim at maintaining the standard of living and payments are granted regardless of employment records.

Accepted Answer

Conservative welfare regimes prioritize income replacement based on contribution records, while liberal welfare regimes prioritize maintaining a minimum standard of living and provide payments regardless of employment records.

Question 5

Within varieties of capitalism theory, liberal market economies (LME) and coordinated market economies (CME) are distinguished. CMEs are characterized by developing a highly specialized labour force, while LMEs develop more general skills.

Accepted Answer

This is correct according to the varieties of capitalism theory. CMEs, such as Germany and Japan, tend to have a more collaborative relationship between employers and employees, with greater emphasis on education and training for highly skilled workers. LMEs, such as the United States and United Kingdom, have a more individualistic approach to employment and tend to develop a more general skill set in their labor force.

Question 6

According to varieties of capitalism, welfare states are&#8230; Please select all that apply.&#10;A) Inefficient since they are an inadequate institutional response to globalization.&#10;B) Efficient since they help to develop comparative institutional advantages.&#10;C) Providing an incentive to develop specialized labour skills.&#10;D) Providing an incentive to develop 'radical innovation'.

Accepted Answer

Welfare states are considered efficient as they help develop comparative institutional advantages by supporting specialized labor skills, which are crucial for maintaining competitiveness in certain industries.

Question 7

What is characteristic for the system of flexicurity? Please select all that apply.&#10;A) Generous unemployment compensations.&#10;B) Active labour market policies.&#10;C) Wage flexibility.&#10;D) High level of unemployment protection.

Accepted Answer

The answer of What is characteristic for the system of...

Question 8

What does Okun's thesis suggest?&#10;A) Taxes and transfers within a welfare state harm economic efficiency.&#10;B) Welfare states favour the development of structural unemployment (unemployability).&#10;C) Welfare states are efficient since they help to develop comparative institutional advantages.&#10;D) Welfare states are an investment in social capital.

Accepted Answer

Okun's thesis suggests that there is a trade-off between equality and efficiency, implying that taxes and transfers in a welfare state can harm economic efficiency.

Question 9

What are theoretical explanations of structural unemployment? Please select all that apply.&#10;A) High minimum wages.&#10;B) The insider-outsider problem.&#10;C) Gender discrimination.&#10;D) Globalization.

Accepted Answer

The answer of What are theoretical explanations of structural unemployment?...

Question 10

Policy convergence is explained by&#8230; Please select all that apply.&#10;A) functional necessities.&#10;B) policy transfer.&#10;C) policy diffusion.&#10;D) path dependencies.

Accepted Answer

Functional necessities, policy transfer, and policy diffusion all contribute to policy convergence by creating pressures or mechanisms for different entities to adopt similar policies. Path dependencies, however, explain how past decisions influence current policy choices, which can lead to divergence rather than convergence.

Deck 22: The Impact of Public Policies