Deck 5: Latin American and Primary Commodities

Question 1

The first commodity booms in Latin America were based around the export of:

A) Coffee
B) Oil
C) Rubber
D) Gold
E) Indigo

Answer 1

D

Question 2

In the 19^th century, which commodity was exported by Peru, Bolivia, and Chile?

A) gold
B) coffee
C) rubber
D) guano
E) oil

Answer 2

D

Question 3

Which of these has not been a commodity boom in Latin America since 1500?

A) Oil
B) Rubber
C) Tobacco
D) Tea
E) Coffee

Answer 3

D

Question 4

Commodities are known to have _____ supply, and ______ demand.

A) Elastic, elastic
B) Elastic, inelastic
C) Inelastic, elastic
D) Inelastic, inelastic
E) unitary, zero

Question 5

Due to the nature of the supply and demand of commodities, an increase in demand will result in a:

A) Small increase in quantity, large increase in price.
B) Small increase in quantity, small increase in price.
C) Large increase in quantity, small increase in price.
D) Large increase in quantity, large increase in price.
E) No change in quantity, huge change in price.

Question 6

Which of the following was a popular red dye extensively used from the 16^th through the 19^th centuries?

A) indigo
B) henequen
C) guano
D) cochineal
E) none of the above

Question 7

In the GDP equation, the term X-M is known as:

A) Consumption by the public.
B) Foreign direct investment.
C) Trade balance.
D) Government spending.
E) Portfolio capital.

Question 8

What percent of total exports in Latin America are accounted for by commodities?

A) 22
B) 34
C) 42
D) 61
E) 75

Question 9

What percent of GDP is accounted for by commodity exports in Latin America?

A) 12
B) 24
C) 32
D) 37
E) 66

Question 10

In Latin America, commodity exports are _____ percent of total exports.

A) 17
B) 20
C) 33
D) 42
E) 61

Question 11

Which Latin American nation has the largest commodity exports/GDP ratio?

A) Argentina
B) Bolivia
C) Chile
D) Peru
E) Ecuador

Question 12

The ____ of commodity prices makes the management of GDP in Latin America _____.

A) Stability, simple
B) Instability, simple
C) Stability, difficult
D) Instability, difficult
E) These two factors are not related.

Question 13

Which is not a reason an abundance of natural resources can accelerate economic growth within a country?

A) Commodities can be a source of government revenue.
B) Commodities can force a country to have well developed infrastructure.
C) A country with commodities may find it easier to transition into manufacturing than one without such resources...
D) An abundance of natural resources tends to create high level human capital.
E) none of the above

Question 14

National treatment on multinational corporations was typically the normal during the:

A) Lost Decade
B) Golden Age
C) Great Depression
D) WWI
E) WWII

Question 15

In the twentieth century, Latin American governments' taxation and regulation of MNCs has:

A) decreased
B) increased
C) remained constant
D) been confined to the apparel industry.
E) none of the above

Question 16

Which two Latin American nations have a checkered history with state owned oil companies?

A) Brazil and Mexico
B) Brazil and Costa Rica
C) Columbia and Mexico
D) Columbia and Ecuador
E) Bolivia and Peru

Question 17

The tactic known as structure of protection is mainly implemented by _____ countries as a means of protecting their _____.

A) developing, commodities industries
B) developing, manufacturing industries
C) developed, commodities industries
D) developed, manufacturing industries
E) none of the above

Question 18

In a typical structure of protection in developed countries, raw commodities frequently have a ___ tariff.

A) low
B) high
C) average
D) specific
E) ad valorem

Question 19

While China's economic boom may have had a positive effect on the commodities market of Latin American, it may have caused what to occur in Latin America?

A) decreased FDI
B) lessened the growth in labor intensive manufactured goods markets
C) the Dutch disease
D) decreased GDP per capita
E) the resource curse

Question 20

The empirical regularity that countries rich in commodities frequently experience low economic growth is known as:

A) resource curse
B) industrial structure
C) structure of protection
D) Dutch disease
E) national treatment

Question 21

The effect that commodity exports can have on the exchange rate is known as:

A) Dutch disease.
B) Peruvian flu.
C) undervalued exchange rates.
D) PPP.
E) none of the above

Question 22

The effects of commodity exports on the exchange rate and non-commodity exports is known as:

A) overvaluation excesses.
B) exchange controls.
C) Dutch disease.
D) Alejandro's dilemma.
E) supercycle externality.

Question 23

What is the term used to describe the effects of commodity exports on other parts of the economy?

A) Resource curse
B) Structure of protection
C) National treatment
D) Dutch disease
E) Industrial structure

Question 24

The tendency for commodity prices to increase and decrease over a number of years is known as:

A) Dutch disease
B) the resource curse
C) the commodity curse
D) inelasticity
E) the commodity supercycle

Question 25

Show and describe how a commodity boom results from an interaction of demand and/or supply.

Question 26

Assume that Brazil is a major supplier of coffee in world markets. If a disease wiped out Brazilian production for five years, show what would happen to the world price of coffee.

Question 27

Why are the prices of commodities so volatile?

Question 28

Describe why the price of a commodity like soybeans can be naturally volatile. How could this create a macroeconomic problem for a small, relatively poor country such as Paraguay?

Question 29

Draw a graph and show why commodity prices tend to be unstable. Why does this matter for Latin America?

Question 30

Over the last 10 years there was a boom in the price of quinoa caused by an increase in demand. This boom was followed by a collapse in prices. Show and describe both the initial high price and the subsequent collapse.

Question 31

Show why naturally commodity prices are very volatile. Why does this matter to Latin America?

Question 32

Describe the importance of commodities in Latin America in terms of total exports and GDP.

Question 33

Briefly describe how income from commodities can be used to enhance economic development.

Question 34

Explain how the resource curse works to retard economic development in many countries that are commodity producers.

Question 35

How are the resource curse and Dutch disease different?

Question 36

Why hasn't the production and export of commodities made Latin America rich?

Question 37

Part of the growth problem in Latin America is a result of problems with infrastructure and education. How is this related to primary commodities?

Question 38

Explain how Dutch disease has hindered the development of manufacturing in Latin America.

Question 39

Explain what the lithium triangle is.