Deck 4: Political Economy

Question 1

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

A)political party membership
B)highways
C)gasoline and heating oil
D)health care
E)property

Answer 1

B

Question 2

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

A)They typically employ relatively low tariff barriers.
B)They have high state autonomy and capacity.
C)They agree that markets should play a role, if a limited one.
D)Inequality is often a result of state economic policy.
E)The state role in the economy is minimal.

Answer 2

B

Question 3

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

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

Answer 3

C

Question 4

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)liberalism, first challenged by social democracy
D)liberalism, first challenged by mercantilism
E)social democracy, first challenged by liberalism

Question 5

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)increasing the money supply
E)setting lending rates very low

Question 6

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

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

Question 7

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

A)a reverse of economic liberalization.
B)increased criticism of social democracy.
C)a widespread elimination of tariff barriers.
D)a rapid growth in mercantilist policies.
E)shifts in tax forms from national income tax to value-added tax.

Question 8

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 buy private goods but only illegally on the black market.In which of the following categories would this country belong?

A)communist
B)liberalist
C)social democratic
D)mercantilist
E)statist

Question 9

Restrictions that limit the quantities of foreign goods coming into a country are an example of:

A)tariffs.
B)quotas.
C)nontariff regulatory barriers.
D)regulatory fees.
E)free-trade zones.

Question 10

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 lowers the overall value of the economy for less-developed countries.
B)It typically elevates measured income for countries with advanced welfare systems.
C)It typically elevates measured income for less-developed countries.
D)It typically lowers the per capita income in a country no matter its level of development.
E)It increases the gap in economy size between developed and less-developed countries.

Question 11

Which of the following statements about happiness as a measure in political-economic systems is accurate?

A)In the United States, relative income is likely to be a better predictor of happiness than standard of living.
B)High levels of happiness in postcommunist countries demonstrate the effect of culture on happiness.
C)Standard of living is the highest predictor of happiness in most western European countries.
D)The twenty unhappiest countries in the world contain a mix of very poor and very rich states.
E)Latin American countries' very low levels of happiness correlate with very low per capita income.

Question 12

Social democracy can be defined as a system that:

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

Question 13

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)comparative national economics.
D)purchasing power parity.
E)the Human Development Index.

Question 14

Markets can best be defined as:

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

Question 15

________ are the most fundamental components of political economy.

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

Question 16

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

A)equality over freedom.
B)freedom over equality.
C)freedom and equality equally.
D)neither freedom nor equality.
E)democracy over freedom and equality.

Question 17

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

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

Question 18

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.
E)the welfare state.

Question 19

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

A)deflation
B)inflation
C)hyperinflation
D)a fixed currency rate
E)uneven taxation rates

Question 20

Taxes on imported goods are known as:

A)tariffs.
B)quotas.
C)nontariff barriers.
D)regulatory fees.
E)free-trade zones.

Question 21

Which political-economic system views the economy as an instrument to serve state power and national sovereignty?

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

Question 22

Does inequality pose a threat to any particular political-economic system(s)? Can inequality grow if everyone's standard of living is on the rise? What political-economic system is likely to produce the greatest amount of happiness?

Question 23

Which of the following statements about social expenditures is accurate?

A)Very broad welfare systems have been shown 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)In most countries, social welfare expenditures primarily benefit the poor.
E)Social expenditures that come in the form of public goods are used mostly by the very poor.

Question 24

What basic public goods should a state provide? What should be left to the market?

Question 25

Which of the following statements about neocorporatism is accurate?

A)Neocorporatism involves a greater role for organized labor in economic policy than in the liberal model.
B)Neocorporatism is most commonly found in liberalist economies.
C)Economic decisions are primarily made through the competitive interaction of business and labor.
D)Business groups are recognized by the state as official negotiating partners, reducing the influence of trade unions.
E)Neocorporatism largely eliminates the trade union as an organizing element in the economy.

Question 26

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)differences in social expenditures.
E)how high tax rates should be.

Question 27

In what key ways does social democracy differ from liberalism? In what ways is it similar? How would supporters of neocorporatism defend that model as a key element of social democracy?

Question 28

What are the relative benefits and drawbacks of the major measurements-purchasing power parity, the Gini index, and the Human Development Index-in measuring relative wealth and inequality across countries?

Question 29

Why has liberalism become a more dominant political-economic system over the past few decades? Is this change good or bad?

Question 30

The Gini index is one way that social scientists measure:

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

Question 31

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

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

Question 32

Mercantilism is best associated with which of the following policies?

A)free trade
B)tariff barriers
C)elimination of all private property
D)neocorporatism
E)national health care

Question 33

Which of the following statements about global inequality during the past 20 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 much more unequal relative to each other.
C)Most countries' domestic populations have become more equal internally.
D)The global distribution of domestic or international wealth has not changed.
E)The global Gini coefficient has dropped slightly but remains high.

Question 34

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)Most industrial democracies have moved decisively away from the social democratic model.
C)Political forces that oppose liberal trade policies have grown in Europe.
D)The global economic downturn has emboldened proponents of trade liberalization.
E)The large-scale evaporation of social expenditures has weakened the social democratic model considerably.

Question 35

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.
E)reduced their internal income inequality.