Deck 4: Political Economy

Question 1

________ are the most fundamental components of political economy.

A) Property and assets
B) Income and markets
C) Markets and property
D) Supply and demand

Answer 1

C

Question 2

What is the oldest of the political-economic systems,and what system first rose to challenge it?

A) liberalism, first challenged by communism
B) mercantilism, first challenged by liberalism
C) communism, first challenged by social democracy
D) social democracy, first challenged by mercantilism

Answer 2

B

Question 3

In which of the following ways do both communism and mercantilism differ from liberalism?

A) They typically employ relatively low tariff barriers.
B) The state role in the economy is minimal.
C) They agree that markets should play a role, if a limited one.
D) They have more state autonomy and capacity.

Answer 3

D

Question 4

Restrictions that limit the quantities of foreign goods coming into a country are known as

A) nontariff regulatory barriers.
B) quotas.
C) tariffs.
D) regulatory fees.

Question 5

The total market value of all goods and products produced in a year is known as

A) the gross domestic product.
B) the national comparative income.
C) purchasing power parity.
D) the Human Development Index.

Question 6

Country X has no direct taxation of its people,but citizens are limited in what they can earn because wages are fixed.No matter what a citizen's age or job is,the state provides for his or her health costs,education,and retirement,even though the quality of those services may be low.If a citizen does have cash,he or she can only buy private goods illegally on the black market.This country has what kind of political-economic system?

A) communist
B) liberal
C) mercantilist
D) social democratic

Question 7

The ________ is in charge of regulating the supply of money in a country.

A) national trust
B) currency board
C) central bank
D) federal mint

Question 8

Which of the following statements about happiness as an indicator of political-economic systems is accurate?

A) Relative income is a stronger predictor of happiness than standard of living.
B) Standard of living is a stronger predictor of happiness than relative income.
C) Postcommunist countries have higher levels of happiness than very poor countries.
D) Latin American countries' very low levels of happiness correlate with very low per capita income.

Question 9

In the United States,the government cannot take a citizen's property without just cause and compensation.This is an example of

A) a property right.
B) capitalism.
C) a weak state.
D) democracy.

Question 10

Which of the following would be considered a public good in the United States?

A) highways
B) property
C) gasoline and heating oil
D) health care

Question 11

When governments print more money because they lack revenue,one result may be

A) hyperinflation.
B) hyperdevaluation.
C) hyperdeflation.
D) hypertaxation.

Question 12

Taxes on imported goods are known as

A) nontariff regulatory barriers.
B) quotas.
C) tariffs.
D) regulatory fees.

Question 13

Public goods are best defined as

A) goods, provided or secured by the state, that are available for society and indivisible.
B) goods, provided or secured by the state, that only members of the state and government may use.
C) any goods that exist beyond the sovereignty of a state's borders.
D) any goods that exist solely within the sovereignty of a state's borders.

Question 14

Liberalism's view of the relationship between freedom and equality favors

A) equality over freedom.
B) freedom over equality.
C) both equally.
D) neither freedom nor equality.

Question 15

What is a primary tactic used by central banks to combat inflation?

A) making credit less expensive
B) raising interest rates
C) printing more money
D) setting lending rates very low

Question 16

Markets can best be defined as

A) government-produced public goods.
B) the interactions between the forces of supply and demand.
C) fixed locations where products are bought and sold.
D) an outmoded form of resource distribution.

Question 17

Extremely tight control over the money supply may result in ________,a condition that has plagued Japan since 1998.

A) inflation
B) deflation
C) tariffs
D) hyperinflation

Question 18

Since the major economic downturn of the last decade,one trend in the United States,Canada,and Japan has been

A) rapid growth in mercantilist policies.
B) an increase in criticism of social democracy.
C) widespread elimination of tariff barriers.
D) a decline in levels of economic liberalization.

Question 19

Social democracy can be defined as a system that

A) favors freedom over equality.
B) favors equality over freedom.
C) attempts to balance freedom and equality.
D) opposes both freedom and equality.

Question 20

In which of the following ways does using purchasing power parity to calculate GDP differ from the use of straight GDP in measuring a country's economic development?

A) It typically elevates measured income for less-developed countries.
B) It typically elevates measured income for countries with advanced welfare systems.
C) It typically lowers the overall value of the economy for less-developed countries.
D) It typically lowers the per capita income in countries regardless of level of development.

Question 21

Liberalism is best associated with which of the following policies?

A) free trade
B) tariff barriers
C) neocorporatism
D) elimination of all private property

Question 22

What is a public good and why do states provide public goods rather than the market?

Question 23

Which of the following statements about social expenditures is accurate?

A) Welfare systems are meant to support community institutions like the family and the church.
B) In a sense, the welfare state primarily taxes the poor but benefits the middle class.
C) Expenditures on highways are more likely to benefit the well-off than the poor.
D) Social expenditures that come in the form of public goods are used mostly by the very poor.

Question 24

The Gini index is one way that social scientists measure

A) total national wealth.
B) the distribution of public goods.
C) the environmental impact of development.
D) the amount of economic inequality in a society.

Question 25

Which political-economic system views private property as a form of exploitation?

A) social democracy
B) communism
C) liberalism
D) mercantilism

Question 26

What tools do states use in regulating trade with other states? What political-economic systems are most and least likely to impose strict regulations on trade?

Question 27

Which of the following statements about the state of world liberalization in the twenty-first century is accurate?

A) Communism is resurgent in many of the poorest countries in the world.
B) Political forces that oppose free trade and globalization have grown in Europe and the United States.
C) The global economic downturn has emboldened proponents of trade liberalization.
D) The large-scale evaporation of social expenditures has weakened the social democratic model considerably.

Question 28

Overall levels of economic liberalization are on the rise during the last few decades,appearing to indicate that liberalism is the preferred political-economic system.But what qualifications are important to this assessment?

Question 29

Over the past two decades,most countries around the world have

A) increased economic liberalization.
B) decreased economic liberalization.
C) increased their social democratic institutions.
D) become more mercantilist.

Question 30

Which of the following statements about mercantilism is accurate?

A) Mercantilism involves a greater role for the state in economic policy than communism.
B) Mercantilism directs the economy toward certain industries and away from others.
C) Mercantilism mandates that unemployment should be accepted as inevitable.
D) Mercantilism advocates for a state to intervene in the economy only when crises arise.

Question 31

Which of the following statements about global inequality during the past twenty years is accurate?

A) The global Gini coefficient shows that countries have become more equal relative to each other.
B) The global Gini coefficient shows that countries have become less equal relative to each other.
C) The global Gini coefficient has dropped slightly but remains high.
D) The global distribution of domestic or international wealth has not changed.

Question 32

Which political-economic system accepts a role for private property and market forces but is cautious about their benefits to society?

A) social democracy
B) communism
C) liberalism
D) mercantilism

Question 33

Purchasing power parity is a way to measure

A) inequality between people.
B) the buying power of income across countries.
C) changes in inequality over time.
D) how high tax rates should be.

Question 34

In what key ways does social democracy differ from liberalism? In what ways is it similar?

Question 35

What are the relative benefits and drawbacks of using purchasing power parity (PPP),the Gini index,and the Human Development Index to measure relative wealth and inequality across countries?