Question 1

The global division of labour did not arise out of simple local choices freely given but in the historical context of colonialism and domination by the industrial core over the rest of the world. As a result, the best concept to understand this is:

A) comparative advantage
B) absolute advantage
C) competitive advantage
D) relative advantage

C

Accepted Answer

C

Question 2

1830-1876 saw the largest increase in the number of colonies and of people under colonial rule. Why did this happen then?&#10;A) rise of competitive colonialism as a result of economic stagnation in Europe&#10;B) religious fervor&#10;C) the rise of the &#34;Atlantic system&#34;&#10;D) improved transportation

Accepted Answer

The period of 1830-1876 saw economic stagnation in Europe, leading to increased competition between European powers for colonies and resources.

Question 3

After that of the North Atlantic, which steamship route was most important to the world economy in 1913?&#10;A) around Cape Horn&#10;B) from the English Channel to India via the Red Sea and the Suez Canal&#10;C) from North America to Japan&#10;D) from India to Australia

Accepted Answer

The route from the English Channel to India via the Red Sea and the Suez Canal was the second most important steamship route in 1913. This route allowed for faster and more efficient transportation of goods between Europe and Asia, leading to increased trade and economic growth.

Question 4

What are &#34;barter terms of trade&#34;?&#10;A) relative prices of primary products to manufactured goods in world trade&#10;B) how much it costs to buy a raw material&#10;C) changes in raw material process&#10;D) how much it costs to replace manufactured goods in world trade

Accepted Answer

Barter terms of trade refer to the relative prices of primary products (such as raw materials) to manufactured goods in world trade. It reflects the amount of manufactured goods that can be obtained in exchange for a given amount of primary products. A high barter terms of trade indicate a favorable situation for primary product exporting countries, as they are able to obtain more manufactured goods for each unit of their primary product.

Question 5

Indebtedness became a major problem in the world economy in the 1980s. Debt service must be met before other obligations of governments. Why did this happen?&#10;A) recycled dollars from oil purchases were lent recklessly and rising interest rates later trapped borrowers&#10;B) economic growth goals were too ambitious&#10;C) banks raised interest rates and refused to negotiate new ones&#10;D) previously colonial powers paid off debts

Accepted Answer

Recycled dollars from oil purchases were lent recklessly and rising interest rates later trapped borrowers. This statement accurately describes the roots of the debt crisis in the 1980s. Many banks had an abundance of petrodollars that they were eager to lend out, and these loans often went to developing countries that were seeking to fuel economic growth. However, as interest rates rose in the 1980s, debt service became more and more burdensome for these countries, leading to a debt crisis that had far-reaching consequences.

Deck 8: Dynamics of Interdependence: Transformation of the Periphery