Deck 4: Economic Environment

Question 1

Explain whether the recent slowdowns in emerging economies is cyclical or temporary.

Answer 1

A cyclical slowdown means that economic growth of emerging markets could return to a previous high if external demand from developed countries improves. Temporary slowdowns mean that economic growth in emerging markets will keep their long-term recessional pattern and keep lower economic growth levels as experienced after the global financial crisis.
A significant portion of variation after the financial crisis reflected cyclical movement due to changes in aggregate demand rather than structural changes in technological advances or supply factors. Most of the decline of GDP can be attributed to a decrease of total factor productivity as well as reduced contributions from labor and capital growth.

Question 2

Describe the reasons for the decline in GDP growth in emerging economies.

Answer 2

GDP growth rate can be decomposed into contributions from three sources: labor input, capital accumulation, and total factor productivity. Most of the decline in GDP growth is caused by total factor productivity but in recent years, contributions from labor and capital growth have also been declining.

Question 3

Discuss how the economic slowdown in China would affect the growth rate in transitioning and developing countries.

Answer 3

Broad slowdown in emerging economies, especially the slowdown in China, results in developing countries experiencing low economic growth. Low economic growth makes economic recovery difficult for developed countries. A combination of weak growth and tighter financial constraints present a hazard. Negative feedback loops between weak activity in the real sector, and the tightening of domestic financial conditions will create an increase in interest rates for the U.S.

Question 4

Estimate potential output and output gaps between actual GDP growth and potential growth in BRICS.

Question 5

Describe the advantages and disadvantages of the globalization strategy in Singapore.

Question 6

Investigate inequality problems resulting from Singapore becoming a global city. How can the country overcome these problems?

Question 7

Explain the potential pitfalls of continuing Singapore's "global city" strategy.

Question 8

Examine the possibilities of applying Singapore's globalization strategy to other countries.

Question 9

What is Brexit? What are three possible scenarios?

Question 10

What would be the global impact and the potential domestic repercussions of a Brexit?

Question 11

What are Britain's alternatives to leaving the EU?

Question 12

If you were voting on the Brexit referendum, what would you decide? (Consider implications for various sectors)

Question 13

What is the TPP? How does it differ from the NAFTA?

Question 14

Describe the evolution and economic significance of the TPP and its impact on employment and welfare.

Question 15

Compare and contrast the perspectives of various countries on the TPP.

Question 16

Explain the potential long-term impact of the TPP on members and non-members.

Question 17

Compare and contrast the current economic development trends among developed, emerging, and developing countries.

Question 18

What is regional economic integration and why is it significant? Identify and discuss the five different levels of economic integration.

Question 19

What is the significance of signing the TPP for the U.S. and the Japanese economies? How do you think that China will react to this agreement?

Question 20

How is a country's economic development measured? Why is it critical for an MNC to understand the level of a host country's economic development using various methods including HDI and the happiness index?

Question 21

Explain how DHL measures a country's global connectedness. Select your own country of research interest and discuss how it is globally connected.

Question 22

In 2014, Latin America and the Commonwealth of Independent States witnessed a rapid economic decline due to country-specific challenges including:

A) Structural imbalance
B) Infrastructure bottlenecks
C) Increasing financial risk
D) All of the above

Question 23

While transitional economies are expected to grow, they are still vulnerable to:

A) Tightening global financial conditions
B) Deteriorating risks
C) High geopolitical tensions
D) All of the above

Question 24

Which of the following is not a common measure of a country's economic development?

A) GDP and GNP
B) Income and wealth
C) Geopolitical and political tension
D) Happiness Index

Question 25

The World Bank classifies countries with less than ________ per capita as low-income countries.

A) $2,963
B) $37,970
C) $6,846
D) None of the above

Question 26

Which of the following is not considered an emerging economy?

A) Brazil
B) Japan
C) China
D) Russia

Question 27

Easy access to various goods and services and a high standard of living are characteristics of which kind of economy?

A) Low income
B) Transitional
C) Developed
D) Emerging

Question 28

Which of the following refers to income that combines the value of final goods and services produced in a country in a given year and income earned abroad minus income earned by foreigners in the country?

A) Gross Domestic Product
B) Growth Rate
C) Gross National Product
D) Gross National Income

Question 29

Which of the following is often used to measure the standard of living of people in a certain country?

A) Gross Domestic Product
B) Growth Rate
C) Gross National Product
D) Gross National Income

Question 30

Which of the following is included in the Human Development Index developed by the United Nations?

A) Life
B) Knowledge
C) Living standards
D) All of the above

Question 31

Which of the following is not an official happiness index?

A) Gross National Happiness (GNH)
B) Well-being Scale (WBS)
C) Happy Planet Index (HPI)
D) Your Better Life Index (YBLI)

Question 32

Which of the following is not a stage of Regional Economic Integration?

A) Unified market
B) Customs Union
C) Economic Union
D) Common Market

Question 33

Which of the following unified European markets and introduced the euro as the common currency?

A) Trans Atlantic Trade and Investment Partnership
B) Single European Act
C) North American Free Trade Agreement
D) Mercosur

Question 34

Which of the following is not a supplement to the North American Free Trade Agreement?

A) North American Agreement on Environmental Cooperation
B) North American Agreement on Labor Cooperation
C) North American Agreement on Trade Cooperation
D) None of the above are supplements

Question 35

Which of the following is not an official language of the Mercosur agreement promoting free trade and the fluid movement of goods, people, and currency?

A) Spanish
B) Guarani
C) Italian
D) Portuguese

Question 36

Which of the following is not a stated goal of the Trans Pacific Partnership?

A) Enhance trade and investment among TPP partner countries
B) Promote innovation
C) Support the retention of jobs
D) Enhance human security

Question 37

Which of the following is not one of the four pillars of the DHL Global Connectedness Index?

A) Trade
B) Innovation
C) Capital
D) People

Question 38

The DHL Global Connectedness Index is measured by the ______ and ______ of a country's integration with the rest of the world.

A) GDP; GNP
B) Growth; income
C) Depth; breadth
D) None of the above

Question 39

Nine of the ten most connected countries on the DHL Global Connectedness Index are in which continent?

A) North America
B) South America
C) Asia
D) Europe

Question 40

Which of the following has not been a factor in recent low global connectedness trends?

A) Political
B) Geographical
C) Economic
D) Happiness

Question 41

Which of the following countries has consistently topped the list of the Global Competitive Index?

A) Switzerland
B) United States
C) China
D) Singapore

Question 42

What is the difference between GNP, GDP, and GNI?

Question 43

Why is the Happiness Index a useful measure of a country's economic development?

Question 44

Can global connectedness rise and fall? Explain.

Question 45

As income and wealth are measures of a country's economic development, what are the different levels of income and wealth and what are their characterizations?

Question 46

Explain the five stages of regional economic integration and their importance.

Question 47

What is the purpose of the Global Competitive Report (GCR)? How might the factors of the GCR shape economic agendas?