Deck 13: The Political Economy of Investment and Sustainable Development

Question 1

Which of the following statements about the Third World is NOT true?

A) The most poverty-stricken countries are located in Asia.
B) More than half the deaths of children under five are attributable to malnutrition.
C) More than one billion people live in poverty on less than a dollar a day.
D) Women and children suffer more from poverty than do men.

Answer 1

The most poverty-stricken countries are located in Asia.

Question 2

Third World countries typically are most lacking in

A) labor.
B) resources.
C) capital.
D) products that can be sold on the international commodities market.

Answer 2

capital.

Question 3

Taken as a whole, on which continent is a majority of the people residing there at the lowest level of living?

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

Answer 3

Africa

Question 4

The World Bank

A) usually charges above-market interest rates.
B) primarily makes loans to capital-poor countries.
C) was originally formed as a way to help ex -colonies develop diversified economies.
D) is under the control of the International Monetary Fund (IMF).

Question 5

In recent years, the most important source of private capital flow into emerging or Third World economies has been

A) gains from Third World investments in Europe and the United States.
B) direct investment from abroad.
C) from purchases of local stocks and bonds.
D) from sales of newly mined gold.

Question 6

This is NOT a source of capital for developing countries.

A) imports of consumer goods.
B) loans from banks.
C) grants or foreign aid from abroad.
D) direct investment by multinational corporations.

Question 7

Capital for economic development comes primarily from which international organization?

A) International Monetary Fund (IMF)
B) World Bank
C) World Trade Organization (WTO)
D) International Trade Organization (ITO)

Question 8

Of the following, what would advocates of a new international-economic order (NIEO) NOT like to see?

A) foreign-aid grants
B) curtailment of all multinational corporate (MNC) investment
C) debt forgiveness
D) technology transfers

Question 9

Which institution provided the primary forum for the promotion of a new international-economic order (NIEO) goals?

A) United Nations
B) European Union
C) African Union
D) Arab League

Question 10

Which of the following is NOT a member of the capital-rich Group of Seven?

A) Canada
B) Italy
C) Saudi Arabia
D) Germany

Question 11

This has been the most successful cartel.

A) coffee
B) copper
C) platinum
D) oil

Question 12

Terms of trade refers to

A) the ratio of import prices from one country to those of another.
B) the ratio of export prices from one country to those of another.
C) percentage of trade for Third world countries demanded by the new international-economic order (NIEO).
D) percentage of countries that are members of a cartel and can command high prices for their commodities.

Question 13

Which of the following would not be classified as a ?newly industrializing country? (NIC)?

A) Singapore
B) Taiwan
C) South Korea
D) Niger

Question 14

Which of the following is not a regional economic organization?

A) Caribbean Community and Common Market
B) North American Free Trade Agreement (NAFTA)
C) Andean Group and MERCOSUR in South America
D) New Hebrides Economic Cooperation Council

Question 15

According to observers like Jeffrey Sachs

A) the poor are just like the rich, but with less money.
B) the poor live in different health conditions from those of the industrialized countries-a fundamental cause of persisting poverty.
C) dependency theory best explains the persistence of Third World poverty.
D) David Ricardo?s theory of comparative advantage best explains the persistence of Third World poverty.

Question 16

The concept of transfer pricing involves the role of

A) multinational corporations.
B) the new international-economic order (NIEO).
C) World Bank.
D) International Monetary Fund (IMF).

Question 17

Jean Raspail?s novel The Camp of the Saints deals in part with

A) religious fervor in the Third World.
B) religious connections to the pursuit of wealth.
C) the crusades.
D) unbalanced global demographic trends.

Question 18

The concept of structural violence is associated with

A) David Ricardo.
B) Adam Smith.
C) Marxists.
D) Neo-functionalists.

Question 19

From the Marxist perspective, the bourgeoisie could be equated with the

A) capitalist class.
B) proletariat.
C) peasants.
D) yeomen.

Question 20

Official Development Assistance (ODA) refers to

A) help in knowing how to apply for grants.
B) foreign aid.
C) refinanced loans.
D) trade preferences.

Question 21

The external debt load or burden a country bears is typically calculated as

A) a percent of imports.
B) a percent of exports.
C) a percent of Gross Domestic Product (GDP) or Gross National Income (GNI).
D) a percent of the gold in its treasury.

Question 22

Transfer pricing refers to

A) prices subsidiaries within a corporation charge each other for components transferred from one to another.
B) a way to reduce taxes paid by multinational corporations.
C) a mechanism for repatriating funds as in bringing home earnings from production abroad
D) all of the above.

Question 23

Which of the following see First World economic dominance as undermining Third World economic development?

A) realists
B) liberals or pluralists
C) economic structuralists
D) social constructivists

Question 24

Which perspective tends to focus on relations of class dominance in the global economy?

A) neo-realists
B) functionalists
C) social constructivists
D) capitalist world-system theorists

Question 25

Which of the following is NOT a reason for dependency theory falling out of favor?

A) Empirical studies have shown that terms of trade do not always deteriorate for producers of commodities.
B) Critics have raised the question of whether dependency creates social and economic backwardness or, by contrast, whether it is economic and social backwardness that leads to a situation of dependency.
C) Protectionist policies engendered by dependency theory were failures, leading to inefficiency and stifled technological progress.
D) By the 1990s many countries had experienced an economic boom due to successful protectionist trade policies.

Question 26

The concepts of center and periphery are associated with

A) realists.
B) pluralists or liberals.
C) economic structuralists.
D) social constructivists.

Question 27

ECLA and UNCTAD economists conducted studies on

A) unequal terms of trade.
B) government subsidies in the Third World.
C) realist critiques of economic failure in the Third World.
D) monetary cycles.

Question 28

HIV and AIDS are most common in

A) Asia.
B) South America.
C) Africa.
D) Europe.

Question 29

The Lomé Conventions dealt with

A) European trade preferences for Third World countries.
B) aid preferences for Third World countries.
C) attempts to restrict arms sales to the Third World.
D) attempts to improve the environment in Africa and Asia.

Question 30

Private banks are prohibited from loaning money to Third World governments.

Question 31

Many governments have found it difficult to regulate and tax multinational corporations.

Question 32

The threat of default can often win a Third World country concessions from its lenders.

Question 33

Prices for Third World commodities have increased substantially over the last two decades.

Question 34

Overall, the population growth rates of the Third World have slowed since the 1960s.

Question 35

UN conferences have achieved clear consensus on how to address the world?s population problem.

Question 36

Dependency theorists-both Marxist and non-Marxist-agree that the international bourgeoisie or capitalist class is to blame for the poor level of economic development in Third World countries.

Question 37

Demands for a New International Economic Order (NIEO) were led by the European Union.

Question 38

The World Bank is closely associated with efforts to improve the economies of Third World countries.

Question 39

Debt forgiveness is a form of foreign aid.

Question 40

Write an essay on economic development, and the lack thereof, in the Third World. What are the causes of underdevelopment? The consequences? What are the prescriptions for boosting economic development? What does the future hold for the economies of the Third World?

Question 41

Describe and critically examine the activities of multinational corporations (MNCs) in the Third World. Why are MNCs so controversial? How can they help Third World countries? How can they harm them?

Question 42

What are the main demands of the New International Economic Order (NIEO)? How did NIEO come about? How successful has it been?

Question 43

What is sustainable development? Is it more than a slogan? How difficult do you think it is to achieve the suggested trade-offs?

Question 44

Define the concept terms of trade and provide a hypothetical example, using a capital-rich and a capital-poor country.

Question 45

Explain the dependency perspective on Third World poverty. What is to be done to remedy the situation?

Question 46

How does the international community reassure investors who fear the takeover of their assets by nationalization, expropriation, or other political and economic risks in some countries? Why are such assurances necessary for sustaining economic development?

Question 47

Explain the concept of transfer pricing. Why might multinational corporations resort to such tactics and how might governments keep this from happening?

Question 48

What are the three factors of production that combine to produce the goods and services, thus contributing to economic output? What are their relative importance and availability for further use in production efforts?

Question 49

Compare, contrast and assess the dependency, Marxist, and capitalist world-system perspectives on Third World poverty.