Deck 9: International Political Economy

Question 1

"The inexorable integration of markets, nation-states, and technologies to a degree never witnessed before" refers to ________.

A) capitalism
B) mercantilism
C) globalization
D) the MNC
E) radicalism

Answer 1

C

Question 2

How do economic liberals view human nature?

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

Answer 2

D

Question 3

European economic integration has been based solely on liberal economics; the EU has not utilized protection or government subsidies.

Answer 3

False

Question 4

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) fewer benefits for rich states than for poor ones.
D) loss of power for some states.
E) rising prices for most goods.

Question 5

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) Individuals cannot act rationally.
E) High prices will result from market competition.

Question 6

Radical political economists criticize MNCs for benefiting the rich at the expense of the poor.

Question 7

The United States' first secretary of the treasury, Alexander Hamilton (1757-1804) advocated protectionist trade policies. This is consistent with ________.

A) economic liberalism
B) radicalism
C) colonialism
D) mercantilism
E) Marxism

Question 8

Which statement is True of economic globalization?

A) Economic liberalization increases the territorialization of economic life.
B) Policies of economic liberalization promote globalization.
C) Trade on a global level did not begin until the twentieth century.
D) New transportation technologies have not influenced international trade.
E) The international political economy has always been as globalized as it is today.

Question 9

Economic crises affect all states similarly.

Question 10

Liberals favor free trade and argue that states should produce where they have comparative advantage.

Question 11

China is now a member of the World Trade Organization.

Question 12

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 cheap imports
E) encouraging weak governments with little economic role

Question 13

The radical view of the international political economy is more normative than that of mercantilists or liberals because

A) radicals praise the work of multinational corporations (MNCs) in the developing world to date.
B) radicals argue for minimal government intervention in the economy.
C) radicals criticize capitalism for worsening economic problems in the developing world.
D) liberals do not care about the outcomes of their policies on the poor.
E) radicals expect a revolution of the poor.

Question 14

The development gap is a phenomenon of the past. At the turn of the new millennium, there were no clear-cut regional economic disparities between the North and the South.

Question 15

The period from the beginning of the nineteenth century through World War I is often referred to as "Pax Britannica." During this time

A) British colonialism began to end.
B) Britain's hegemony was highly contested by the United States.
C) Britain pursued mercantilist policies.
D) Britain discouraged investment abroad.
E) Britain facilitated trade by lowering its tariffs.

Question 16

Mercantilists believe that economic policy dictates states' self-interest and that states should therefore give MNCs free reign.

Question 17

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

Question 18

The 2009 Eurozone Crisis was not just a debt problem, but also a problem of trade imbalances.

Question 19

NAFTA differs from the European Union in that, unlike the EU, it contains social, political, and security dimensions.

Question 20

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

Question 21

Radicals attribute the conflictual nature of the international system to

A) competition between workers and the owners of wealth.
B) government intervention in the economy.
C) the failures of Bretton Woods institutions.
D) workers' power over state policies.
E) international anarchy.

Question 22

Multinational corporations (MNCs), which have increased dramatically in number during the post-World War II era,

A) are products of the twentieth century.
B) have failed to meet any of their objectives.
C) can be political as well as economic organizations.
D) are all based in rich countries.
E) face no regulations by state governments.

Question 23

Some liberal theorists go beyond simply extolling the economic benefits of liberalism and claim that an international liberal economy

A) will eventually make diplomatic relations irrelevant.
B) helps prevent war.
C) undoes the damage caused by realist theory.
D) will end poor states' dependence.
E) will end all poverty.

Question 24

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
E) subsidizing corporations like Airbus

Question 25

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) competitive trading bloc
B) absolute advantage
C) national interest
D) floating exchange rates
E) comparative advantage

Question 26

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 fallen out of favor in North America.
D) has gained popularity in North America but fallen out of favor in Europe.
E) has been blocked in Asia.

Question 27

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) increase government bureaucracy.
C) lower trade barriers.
D) implement structural adjustment programs.
E) loan money to the UN.

Question 28

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

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

Question 29

The Bretton Woods institutions are reflective of a ________ economic perspective.

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

Question 30

When exchange rates float, currencies

A) sell at a value determined by the market.
B) sell for less than their market value.
C) sell for more than their market value.
D) sell at a predetermined rate.
E) are not bought and sold at all.

Question 31

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.
E) conflict between the owners of capital and the workers.

Question 32

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.
E) negative, leading to increases in military clashes among member states.

Question 33

MNCs are considered by liberals to be

A) open to government regulation.
B) tools for exploiting the developing world.
C) rendered irrelevant by the state.
D) efficient agents of economic improvement.
E) in service to the political interests of the state.

Question 34

Economic liberals view international economic competition as

A) healthy and desirable.
B) likely to lead to war.
C) a phenomenon that suppresses developing countries.
D) a phenomenon that suppresses the working class.
E) something that only benefits multinational corporations (MNCs).

Question 35

The Bretton Woods institution designed to provide short-term loans to states facing temporary balance-of-payments difficulties is ________.

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

Question 36

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) a derivative
D) portfolio investment
E) offshore financing

Question 37

Which of the following is True of the General Agreement on Tariffs and Trade (GATT)?

A) Its principles were designed to allow states to treat foreign firms differently than their domestic firms.
B) It did not allow for states to claim exemptions for any reason.
C) It did not have any mechanism through which states could settle disputes.
D) Its principles were designed to defend the use of protectionist trade measures.
E) Its principles allowed for preferential access for products from developing countries to the markets of developed countries.

Question 38

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.
E) the World Trade Organization, the General Agreement on Tariffs and Trade, and the International Monetary Fund.

Question 39

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) derivative investing.
D) sovereign wealth funds.
E) moral hazard.

Question 40

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

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

Question 41

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.
E) engaging in debt restructuring.

Question 42

The 2008-2009 global economic crisis began because

A) China's economy went into recession.
B) U.S. markets had excess credit and insufficient equity.
C) the price of oil increased sharply in 2008.
D) the IMF refused to respond to the crisis.
E) the developing world began a boycott against U.S. products.

Question 43

During the 2008-2009 global financial crisis

A) the countries of Africa all suffered significant financial setbacks.
B) African countries were set back in their access to international markets.
C) U.S. and European investments in African countries such as Ghana and Kenya increased.
D) Investment in African countries such as Ghana and Kenya from emerging economies like China and India increased.
E) African countries did not experience any change in foreign investments.

Question 44

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.
E) oil prices increased during the crisis.

Question 45

The radical perspective on international political economy includes the view that MNCs are

A) exploiters of the poor.
B) losing political power over time.
C) benefactors of the poor.
D) essentially unimportant.
E) helping the poor to restructure the world economy.

Question 46

Mercantilists' view of MNCs is that

A) MNCs must be left unregulated so they can help stimulate the market economy.
B) no MNCs should be denied market entry.
C) MNCs should become more involved in domestic politics.
D) MNCs are economic actors that are more important than political actors.
E) MNCs are economic actors that need to be controlled.

Question 47

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) mortgage defaults and trade imbalances.
D) derivative markets and public-sector debt.
E) derivative markets and trade imbalances.

Question 48

Some prominent observers wanting to reform the IMF and World Bank

A) say the World Bank and the IMF have already ended global economic inequality.
B) suggest reforms to the voting structures of the World Bank and the IMF.
C) call for an increase in the number of Western-trained economists employed at the World Bank and IMF.
D) say MNCs should have more voting power in the institutions.
E) feel only rich countries should be members of the institutions.

Question 49

What is the development gap?

A) the difference between the highly developed international organizations in the North and the weakly developed international organizations in the South
B) the difference between the highly developed international organizations in the South and the weakly developed international organizations in the North
C) the difference between the economically well off states of the North and the poorer South
D) the difference between the economically well off states of the South and the poorer North
E) the goal sought by the Group of 77 in the New International Economic Order

Question 50

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) decrease attention paid to "soft" issues such as education and health care.
E) cut the role of the state in the international economy.

Question 51

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 developing countries.
E) The agreement excludes phasing out tariffs on most agricultural products.

Question 52

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

A) includes states that are equal in size.
B) is opposed by multinational corporations rather than political elites.
C) has no intended social, political, or security dimensions.
D) has led to little controversy.
E) allows for easy immigration among members.

Question 53

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.
E) regionalism produces equal losses for all.

Question 54

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) portfolio investment
B) sustainable development
C) the development gap
D) the Washington Consensus
E) the Beijing Consensus

Question 55

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.
E) They have completely ignored the crisis.

Question 56

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) It was the only Bretton Woods institution involved in lending to countries.
E) The IMF was not involved.

Question 57

What role do NGOs play in the international political economy?

A) They pursue state interests by increasing state resources.
B) They help bring MNCs together in pursuit of reforms to the international capitalist system.
C) They carry out locally based development projects and channel finance to individuals.
D) They use their votes in the IMF to promote sustainable development programs.
E) They argue development only comes through smart government policies.

Question 58

Although the EU has generally been oriented toward increased free trade, an exception involving state intervention has occurred in which area?

A) the movement of services
B) the movement of goods
C) the movement of capital
D) the agricultural sector
E) the high-technology sector

Question 59

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) portfolio investment.
E) structural adjustment policy

Question 60

A major cause of the 2009 Eurozone Crisis was

A) Germany's declining exports.
B) Greece's large-scale public-sector borrowing and debt.
C) a sharp rise in oil prices beginning in 2008.
D) low levels of bank lending over the previous decade.
E) low wages in Portugal, Italy, and Spain.

Question 61

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 would you find most appealing, and why?

Question 62

What does sustainable development mean? Compare and contrast the different approaches 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 63

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 state of the international political economy today? And why?

Question 64

A drawback of globalization is

A) decreasing immigration.
B) increasingly illiberal trade policies.
C) the rise of illegal markets for drugs and intellectual property.
D) the inability of MNCs to compete across multiple countries.
E) the global decline in average wealth per person.

Question 65

In recent years, the World Bank, the International Monetary Fund, and the World Trade Organization have been the targets of well-orchestrated protest campaigns. Who are the protesters, and what are their complaints? Are these complaints justified? Why or why not? Based on your answers, what should be done with regard to these economic institutions?

Question 66

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 the recent events and how they shape your beliefs in economic theory.