Question 1

In an effort to prevent another global depression, world leaders at the Bretton Woods conference in 1944 agreed to a ________.

Accepted Answer

The Bretton Woods conference led to the establishment of a fixed exchange rate system where currencies were pegged to the U.S. dollar, which was in turn convertible to gold at a fixed rate, marking a significant step in international financial cooperation.

Question 2

The United States is the world's biggest debtor nation because Americans ________.

Accepted Answer

The United States is considered the world's biggest debtor nation primarily because it consumes more than it produces and imports more than it exports. This leads to a trade deficit, where the value of imports exceeds the value of exports, contributing to national debt.

Question 3

What organization provides loans to all countries in order to keep exchange rates stable and even help them pay their international debts?

Accepted Answer

The International Monetary Fund (IMF) is the organization that provides loans to countries with the aim of stabilizing exchange rates and assisting countries in paying their international debts. Its primary purpose is to ensure the stability of the international monetary system.

Question 4

Both the World Bank and the IMF require that countries agree to practice ________ and hold down inflation.

Accepted Answer

The World Bank and the IMF often require countries to agree to practice austerity measures as a condition for loans or financial assistance. Austerity involves policies aimed at reducing government budget deficits through spending cuts, tax increases, or a combination of both, and is often associated with efforts to keep inflation low.

Question 5

What is the artificial currency that is based on the basket price of multiple currencies that the IMF uses to make loans?

Accepted Answer

Special Drawing Rights (SDR) is the artificial currency created by the International Monetary Fund (IMF) based on a basket of major international currencies, used for international financial transactions among central banks and the IMF.

Question 6

Which of the following statements regarding globalization is true?

Accepted Answer

Globalization relies on open world markets for the free flow of goods, services, and capital, making it vulnerable to protectionist policies and trade barriers.

Question 7

Which of the following is a cause of the latest round of globalization?

Accepted Answer

The decrease in tariff barriers as a result of GATT and WTO has been a major cause of the latest round of globalization.

Question 8

Which of the following is NOT a cause of the latest round of globalization?

Accepted Answer

Farm subsidies in rich countries are not a direct cause of the latest round of globalization. Instead, they are more related to domestic agricultural policies and can distort global trade patterns rather than directly contributing to the process of globalization, which is more directly influenced by factors like international banking, wage differentials, communication technologies, and transportation costs.

Question 9

The World Trade Organization was preceded by the ________ and both have worked to ________.

Accepted Answer

The World Trade Organization (WTO) was preceded by the General Agreement on Tariffs and Trade (GATT), and both organizations have worked towards decreasing tariffs to encourage free trade among countries.

Question 10

Which of the following is an effect of globalization, according to leftists?

Accepted Answer

The answer of Which of the following is an effect...

Question 11

NAFTA and the EU are both examples of a ________.

Accepted Answer

NAFTA (North American Free Trade Agreement) and the EU (European Union) are both examples of trade blocs, which are groups of countries that have agreed to reduce or eliminate trade barriers among themselves.

Question 12

Which of the following is true regarding NAFTA?

Accepted Answer

NAFTA, the North American Free Trade Agreement, primarily focused on reducing trade barriers such as tariffs between its member countries, which include the United States, Canada, and Mexico. Its main goal was to increase economic integration and trade among these nations, rather than aiming for a single market or federation like the European Union, or having a complex governing body.

Question 13

Some countries like Japan and China practice neo-mercantilism by minimizing ________.

Accepted Answer

Neo-mercantilism involves strategies aimed at maximizing exports and minimizing imports to boost a country's trade surplus. Minimizing consumption (domestically) can be a part of this strategy, as it can reduce the demand for imports.

Question 14

People and nations will start to practice ________ if they come to believe that they are in an economic war.

Accepted Answer

Protectionism is the economic policy of protecting domestic industries from foreign competition by means of tariffs, quotas, and other trade barriers.

Question 15

If you chaired the Federal Reserve, would you prefer a strong dollar or a weak dollar? Discuss the causes and consequences (good and bad) of each in your answer.

Accepted Answer

The answer of If you chaired the Federal Reserve, would...

Question 16

How does the Great Recession of 2008-2009 compare to the Great Depression of the 1930s? How are the causes of each similar? How are they different? What other similarities or differences exist concerning the actual nature (duration, intensity, etc.) of these economic crises?

Accepted Answer

The answer of How does the Great Recession of 2008-2009...

Question 17

Compare the different roles and functions of the World Trade Organization, the International Monetary Fund, and the World Bank. Are all of these institutions working toward the same goal? What economic theory underlies each of them? In your opinion, which, if any, have been the most effective?

Accepted Answer

The answer of Compare the different roles and functions of...

Question 18

What is globalization? Is it a new phenomenon? If not, how is the latest form of globalization different from others, and what world events have permitted this?

Accepted Answer

The answer of What is globalization? Is it a new...

Question 19

Globalization has been hailed as both savior and villain. What arguments are presented on each side of the argument? Which side do you agree with most? Why? Is the effect the same in developed and developing countries?

Accepted Answer

The answer of Globalization has been hailed as both savior...

Question 20

How does the North American Free Trade Agreement compare to the European Union? Discuss the role of trade blocs in general in your answer as well as the level of integration and functions of NAFTA and the EU. Will NAFTA ever become a North American version of the EU?

Accepted Answer

The answer of How does the North American Free Trade...

Quiz 17: The United States and Globalization