Deck 8: International Political Economy

Question 1

Liberals favor free trade and argue that states should produce goods in which they have comparative advantage.

Answer 1

True

Question 2

Which of the following is true of the beliefs of economic liberalism,as exemplified by the writings of Adam Smith?

A) Governments should encourage exports over imports.
B) Markets should be kept free from government interference.
C) Markets are not efficient.
D) High prices will result from market competition.

Answer 2

B

Question 3

The IMF lent money to a Western country during the 2008-2009 financial crisis.

Answer 3

True

Question 4

How do economic liberals view human nature?

A) Humans are aggressive.
B) Humans always have conflictual tendencies.
C) Humans are rational and act to maximize self-interest.
D) Humans are naturally cooperative as individuals.

Question 5

Economic liberals see NAFTA as an example of U.S.expansionism and exploitation of the Mexican workforce.

Question 6

The Washington Consensus and Beijing Consensus are products of economic liberal thinking.

Question 7

Radicals argue that the state tends to support

A) the working class.
B) the reduction of capitalist markets.
C) the developing world.
D) owners of the means of production.

Question 8

To supporters of economic liberalism,MNCs are a positive development.

Question 9

The 1989 ban the EU placed on imports of beef from cattle treated with artificial growth hormones to protect public health is an example of ________.

A) the Washington Consensus
B) a balance of payments
C) a nontariff barrier
D) portfolio investment

Question 10

Several developing countries have created institutions that are designed to serve as alternatives to the World Bank.

Question 11

China is now a member of the World Trade Organization.

Question 12

The Bretton Woods institutions,including the World Bank,IMF,and GATT/WTO,represent radicals' goals of free trade and unobstructed financial markets.

Question 13

Which economic policy would a mercantilist favor?

A) promoting exports over imports
B) free trade
C) promoting equitable distribution of resources in the international system
D) promoting an increase in imports

Question 14

When the United States increased tariffs on steel to help protect its steel manufacturers,this is known as ________.

A) Marxism
B) radicalism
C) economic liberalism
D) protectionism

Question 15

A country that adopted the euro can use monetary policy as an instrument of economic policy.

Question 16

Economic radicals believe that ________ led to the economic chasm between the developed and developing world,which they witnessed developing at the end of "Pax Britannica."

A) protectionism
B) communism
C) capitalism
D) mercantilism

Question 17

When the buying and selling of currencies by market participants determines the value of one currency compared to other currencies,this is known as

A) using protectionism.
B) having a fixed exchange rate.
C) having a balance of payments surplus.
D) having a floating exchange rate.

Question 18

The WTO permits developing countries to impose higher tariffs than industrialized countries.

Question 19

Lowering taxes and government spending is a type of

A) monetary policy.
B) fiscal policy.
C) microeconomic policy.
D) protectionist policy.

Question 20

Economic liberals argue that free trade and open markets on an international scale will create

A) greater economic development for all states involved.
B) stratification between rich and poor countries.
C) loss of power for some states.
D) rising prices for most goods.

Question 21

The three Bretton Woods Institutions are

A) the United Nations,the General Agreement on Tariffs and Trade,and the World Bank.
B) the United Nations,the General Agreement on Tariffs and Trade,and the World Trade Organization.
C) the General Agreement on Tariffs and Trade,the World Bank,and the International Monetary Fund.
D) the World Trade Organization,the United Nations,and the World Bank.

Question 22

The European Union's Common Agricultural Policy,which provides support to its farmers in order for them to remain competitive,is a ________ policy.

A) foreign direct investment
B) portfolio investment
C) liberal
D) protectionist

Question 23

The Bretton Woods institutions are reflecting ________ economic ideas.

A) radical
B) constructivist
C) liberal
D) mercantilist

Question 24

The main sticking point in the failure of the Doha Round,the most recent round of trade negotiations under the purview of the WTO,was

A) India's unfair advantage in the manufacture of textiles.
B) direct foreign investment.
C) China's accession with the label "developed" rather than "developing" country.
D) the liberalization of agricultural markets.

Question 25

Although originally designed to facilitate reconstruction in post-World War II Europe,much of the World Bank's funding actually has been used to

A) promote economic development.
B) lower trade barriers.
C) implement structural adjustment programs.
D) loan money to the UN.

Question 26

If a state faced balance-of-payments difficulties and needed a short-term loan to deal with the problem,it would likely turn to ________.

A) the United Nations
B) the International Monetary Fund
C) the General Agreement on Tariffs and Trade
D) the World Trade Organization

Question 27

State-owned investment funds composed of a range of financial assets including stocks and bonds,precious metals,and properties formed in capital-surplus countries are known as ________.

A) sovereign wealth funds
B) offshore financing
C) direct foreign investment
D) portfolio investment

Question 28

If the value of a state's imports of goods and services exceeds the value of its exports of goods and services,this is referred to as that state having

A) a current account deficit.
B) a balance of payments surplus.
C) microeconomic policies in place.
D) nontariff barriers.

Question 29

European integration has led to the creation of the euro,which is

A) a common passport for European citizens.
B) a common foreign policy for EU member states.
C) a common European language.
D) a common currency.

Question 30

Investing in another country's stocks or bonds without taking direct control of those investments is called ________.

A) direct foreign investment
B) a sovereign wealth fund
C) portfolio investment
D) offshore financing

Question 31

What was one of the problems regarding the renegotiation of NAFTA in 2017?

A) The interests of different sectors within each state were divergent.
B) NAFTA did not deal with agriculture.
C) No country was pushing for greater environmental and labor protections,and NGOs were therefore causing problems in the negotiations.
D) Mexico wanted the renegotiations to take a long time so that they would play an important role in its 2018 presidential election.

Question 32

Which of the following EU practices or policies is compatible with liberal economic theory?

A) creating a large market with free movement of goods and services
B) using protective tariffs against the United States and Japan
C) maintaining state subsidies to farmers
D) enforcing barriers on immigration

Question 33

Since the 1990s,economic regionalism

A) has fallen out of favor,and regional agreements have been weakened or scrapped.
B) has increased in popularity,and new regional agreements have been negotiated and existing ones strengthened.
C) has gained popularity in Europe but has fallen out of favor in North America.
D) has been blocked in Asia.

Question 34

The General Agreement on Tariffs and Trade (GATT)enshrined which of the following principles?

A) ensuring foreign enterprises are treated in the same way domestic firms are treated
B) ensuring states never hold a current account surplus while others hold a current account deficit
C) ensuring members do not claim exemptions from the requirement of trade liberalization
D) ensuring that neither developed nor developing countries would have preferential access to others' markets

Question 35

Which theorists focus on the struggle for power between states in the areas of finance and trade?

A) economic modernists
B) economic institutionalists
C) economic liberals
D) economic realists

Question 36

According to economic liberals,multinational corporations (MNCs)________.

A) exploit the working class to benefit the upper class
B) are efficient agents of economic improvement
C) are a main cause of current account deficits
D) have stagnated the growth of the world economy

Question 37

The overall effect of the European Union has been

A) positive,increasing trade and improving welfare.
B) positive for MNCs but negative for European workers.
C) positive for European workers but negative for MNCs.
D) negative,causing declining trade and increased poverty.

Question 38

Based on the recognition that states differ in their resource endowments of land,labor,and capital,a theory developed arguing that states should trade based on their ________,whereby each state produces and exports those products that it can produce most efficiently relative to other states.

A) exchange rate
B) absolute advantage
C) comparative advantage
D) national interest

Question 39

The profound economic controversies generated by NAFTA illustrate that

A) states can expand their borders without consequence.
B) regionalism produces both winners and losers.
C) the EU has much to learn from NAFTA.
D) only European citizens support regionalism.

Question 40

The North American Free Trade Agreement (NAFTA)differs from the EU in that NAFTA

A) has had a negative effect on the participating multinational corporations.
B) has no intended social,political,or security dimensions.
C) has led to little controversy.
D) includes countries of similar economic size.

Question 41

China's One Belt,One Road initiative is designed to

A) create an alternative to the World Bank.
B) create an alternative to the IMF.
C) provide a conduit for Chinese imports and exports throughout Central and South Asia.
D) decrease the likelihood China will experience an economic financial crisis.

Question 42

The liberal approach to economic development that prioritizes privatization,liberalization of trade and foreign direct investment,government deregulation in favor of open competition,and broad tax reform is known as ________.

A) the development gap
B) sustainable development
C) the Washington Consensus
D) the Beijing Consensus

Question 43

During the 2008-2009 global financial crisis

A) the countries of Africa all suffered significant financial setbacks.
B) the EU provided loans to African countries to help bail them out of their financial difficulties.
C) investment in African countries such as Ghana and Kenya from emerging economies like China and India increased.
D) African countries did not experience any change in foreign investments.

Question 44

Monetary payments sent by foreign workers to individuals in a home country are known as

A) sovereign wealth funds.
B) foreign direct investments.
C) portfolio investments.
D) remittances.

Question 45

The Beijing Consensus approach to economic development,a model based on China's rapid economic growth,implies

A) applying liberal economic policies to East Asia to assist with development in that region.
B) working through the Association of Southeast Asian Nations (ASEAN)to pursue growth and development.
C) not permitting private companies to function in the economy.
D) experimenting with policies that are compatible with a state's political structure and experience rather than with economic liberalism.

Question 46

Which of the following is true of economic trade agreements?

A) The EU has worked hard to prevent the creation of additional trade agreements.
B) They have never been successful in increasing trade among their members.
C) They are formed only by states in similar regions.
D) They can be regional or transregional.

Question 47

The UN's 2001 Millennium Development Goals set forth eight goals designed to

A) abolish the capitalist system.
B) reduce poverty and increase sustainable human development.
C) reform international lending agencies such as the IMF and World Bank.
D) cut the role of the state in the international economy.

Question 48

Which of the following is true of the Trans-Pacific Partnership (TPP),an agreement that was negotiated in late 2015 between the United States and Japan and ten other Pacific Rim countries?

A) The agreement excludes protections for labor and the environment.
B) China is excluded as a participant.
C) The agreement excludes protections for copyrights and patents.
D) The agreement excludes phasing out tariffs on most agricultural products.

Question 49

For dependency theorists,MNCs are seen as

A) institutions that should replace the World Bank and IMF.
B) entities that should not be highly regulated.
C) the key to creating an equal and fair international economic system.
D) facilitators that perpetuate the dominance of the North.

Question 50

Which of these statements differs from the economic liberal model in current thinking about approaches to economic development?

A) Political institutions should play an important role in fostering development,not just economic ones.
B) Developing countries should adopt market-oriented economic policies.
C) Efficient distribution of resources will occur when developing states allow market competition.
D) MNCs should be regulated as little as possible.

Question 51

Two key factors that contributed to the 2009 Eurozone crisis are

A) public-sector debt and trade imbalances.
B) public-sector debt and mortgage defaults.
C) derivative markets and public-sector debt.
D) derivative markets and trade imbalances.

Question 52

What is the development gap?

A) the difference between highly developed international organizations in the North and weakly developed international organizations in the South
B) the difference between highly developed international organizations in the South and weakly developed international organizations in the North
C) the difference between economically well-off states of the North and the poorer South
D) the difference between economically well-off states of the South and the poorer North

Question 53

How have developed countries and international financial institutions responded to the escalating debt of many developing countries during the 1990s and even through today?

A) They have charged higher interest rates.
B) They have urged those governments to cut spending on development projects.
C) They have canceled large amounts of debt.
D) They have urged those governments to form regional trade agreements.

Question 54

The New Development Bank is

A) the original name for the World Bank.
B) an institution founded by the BRICS states to serve as an alternative to the World Bank.
C) an institution created by the World Bank to help oversee the use of the loans it gives out.
D) criticized because it is dominated by the United States.

Question 55

The idea that rescuing states from the consequences of reckless economic behavior actually encourages future reckless behavior is called

A) hedging.
B) portfolio investment.
C) sovereign wealth funds.
D) moral hazard.

Question 56

The approach to economic development that incorporates a concern for renewable resources and the environment is known as

A) the Washington Consensus.
B) sustainable development.
C) The Beijing Consensus.
D) structural adjustment policy

Question 57

Which of the following is true of the 2009 Eurozone crisis?

A) Greece was forced to take bailouts in return for cutting public spending.
B) It did not affect Greece.
C) Germany worked to fix the problem by encouraging Greece to devalue its currency.
D) It increased labor mobility significantly.

Question 58

Which of the following is a regional trade agreement involving countries in South America?

A) ASEAN
B) Mercosur
C) Transatlantic Trade and Investment Partnership
D) NAFTA

Question 59

Which of the following is true of the role of the IMF during the 2008-2009 global financial crisis?

A) It did not create or change any facilities to help deal with the problem.
B) It provided loans to both Western and non-Western countries.
C) It solved the problem of financial crises.
D) The IMF was not involved.

Question 60

The 2008-2009 crisis began in the United States but spread globally,in part because

A) the United States increased its imports from other countries.
B) the United States decreased its exports to other countries.
C) the United States increased its exports to other countries.
D) the United States decreased its imports from other countries.

Question 61

What does sustainable development mean? Compare and contrast the different approaches that theories have put forth to prescribe what states need to do to develop in a sustainable way.Which approach do you think is most likely to be successful and why?

Question 62

Do you think regional trade organizations have actually benefited the states that formed them? Why or why not? In addressing this question,be sure to discuss the criticisms of regional trade organizations that have been raised and give your perspective on whether those criticisms are warranted or not.

Question 63

Describe the key principles and claims of economic liberalism,then state whether or not you find this theoretical perspective compelling and why.Include in your response some discussion of recent events and how they shape your beliefs in economic theory.

Question 64

Liberals argue that free trade and open markets are always in a state's best interest,but mercantilists/statists and radicals disagree with this contention.What alternatives to unfettered trade and markets do statists and radicals propose,and why? If you were the leader of a developing country,which of the three perspectives-liberal,statist,or radical-would you find most appealing,and why?

Question 65

Within the last decade we have had two major financial crises: the 2008-2009 global financial crisis and the 2009 Eurozone crisis.Describe how you think these crises illustrate how international finance and international trade can impact states today.Given these effects,which economic theory-liberalism,mercantilism/statism,and radicalism-do you think best describes the international political economy today? And why?