Deck 11: Global Economy: Politics and Capitalism

Question 1

To have a laissez-faire economy in which the government role is minimized

A) integrates government and the economy as a single unit.
B) is itself a political decision or choice made by the governments of states.
C) allows governments to make most decisions on market matters.
D) allows religion to influence politics.

Answer 1

is itself a political decision or choice made by the governments of states.

Question 2

The concept of internationalization

A) emphasizes interactions among states.
B) is the same thing as globalization.
C) is the complete opposite of globalization.
D) means the same thing as interdependence.

Answer 2

emphasizes interactions among states.

Question 3

Church teachings in the Middle Ages held that the righteous should not

A) collect interest from loans.
B) make a profit from sales.
C) both A and B
D) neither A nor B

Answer 3

both A and B

Question 4

The total aggregate of goods and services produced in a state in a given year is its

A) Gross National Product (GNP).
B) Monetary reserves.
C) Per Capita Income (PCI).
D) capital accumulation.

Question 5

Gross Domestic Product (GDP) equals

A) GNP (i.e., GDP is the same thing as GNP).
B) GNP + returns on foreign investment.
C) GNP - returns on foreign investments.
D) GNP - returns on domestic investment.

Question 6

Max Weber observed that the rise of capitalism was encouraged by a revolution in religious thought on economic matters. He referred to this as a(n)

A) religious hangover.
B) opiate of the people.
C) Protestant Ethic.
D) spirit of individual enterprise.

Question 7

Mercantilism was dependent on

A) exploitation of labor.
B) a favorable balance of trade.
C) revolutionary activity.
D) comparative advantage.

Question 8

Adam Smith is associated with economic liberalism. John Locke is associated with

A) economic conservatism.
B) mercantilism.
C) protectionism.
D) political liberalism.

Question 9

The new economy of capitalism was accompanied by an era marked by

A) a new feudalism.
B) the rise of kings and kingdoms.
C) the rise of states.
D) challenges to state sovereignty.

Question 10

The father of classical political economy was

A) John Maynard Keynes.
B) Adam Smith.
C) David Ricardo.
D) Karl Marx.

Question 11

The individual credited with taking Adam Smith and David Ricardo?s labor theory of value and adding the exploitative nature of class-based capitalism was

A) John Maynard Keynes.
B) Karl Marx.
C) Vladimir Lenin.
D) John Locke.

Question 12

On international trade, David Ricardo is associated with the concept of

A) imperialism.
B) division of labor.
C) neo-colonialism.
D) comparative advantage.

Question 13

National specialization allows for reaping the benefits of

A) capital investment.
B) comparative advantage.
C) low labor costs.
D) geographic location.

Question 14

The dominant international economic understanding in Europe during the seventeenth and eighteenth centuries was

A) feudalism.
B) the ?new? feudalism.
C) mercantilism.
D) socialism.

Question 15

The spread of the capitalist political economy throughout the globe refers to waves of

A) feudalism.
B) socialism.
C) newly emerging capitalism.
D) imperialism.

Question 16

Neo-colonialism is a system of dominance or exploitation by

A) Communist powers prior to the collapse of the Soviet Union.
B) mercantilist powers.
C) local capitalists.
D) multinational corporations, other business firms, and their home countries-typically the former colonial powers.

Question 17

A key difference between state capitalism and free-market capitalism is

A) dependence on markets by state capitalism.
B) dependence on money by state capitalism.
C) who (the state or private sector) owns or controls capital and makes economic decisions.
D) individuals collect surplus value in state capitalism.

Question 18

When a state devalues its currency in an effort to secure a price advantage for domestic industries-and this is matched by other countries-it is referred to as

A) competition.
B) fair market value.
C) manipulation of currency exchange rates.
D) competitive devaluation.

Question 19

The globalization of the economy is threatened both by the behaviors of individual states and the development of

A) multinational corporations.
B) international monetary organizations.
C) global financial markets.
D) trade blocs.

Question 20

A key institution which supports a free or open trade regime is currently the

A) International Trade Organization (ITO).
B) General Agreement on Tariffs and Trade (GATT).
C) World Trade Organization (WTO).
D) International Telecommunications Union (ITU).

Question 21

The International Monetary Fund (IMF) was established by the

A) World Trade Organization.
B) United Nations Economic Development Fund.
C) Bretton Woods agreements.
D) Group of Seven.

Question 22

In 1970, the relatively fixed exchange rates were

A) reestablished under a revived gold standard.
B) changed to become even more fixed.
C) changed to floating exchange rates.
D) changed to become more helpful to developing countries.

Question 23

Compared to middle- and high-income countries, low-income countries have a relatively high percentage of their gross national product derived from

A) agricultural production.
B) industrial output.
C) high technology applications.
D) a highly educated and skilled labor force.

Question 24

Feudalism

A) had greater economic output per capita than did mid-nineteenth-century capitalism.
B) was made possible because of the development of strong states.
C) saw most people make many long voyages during the course of their lives.
D) was marked by focus on local community rather than larger political units.

Question 25

Capital

A) includes land and natural resources.
B) can include both machines and money.
C) is usually unrelated to savings.
D) is one of the eight factors of production.

Question 26

Which of the following countries are NOT members of the Organization of Economic Cooperation and Development (OECD)?

A) Capital-poor Third World countries
B) Advanced industrial and post-industrial countries
C) Capital-rich, high income countries
D) both choices B and C above

Question 27

The Third World

A) is also known as the ?North.?
B) was once known as the Second World.
C) fares poorly compared to the First World in many economic and social categories.
D) has substantially higher per capita energy consumption than does the First World.

Question 28

Countries at which level of development are most likely to have the highest population growth rates?

A) low income.
B) middle income.
C) high income.
D) highest income.

Question 29

The impact of globalization on high-tech jobs in the United States over the next few years promises to

A) be minimal.
B) be substantial.
C) have no impact.
D) be catastrophic.

Question 30

The General Agreement on Tariffs and Trade (GATT) was succeeded by the

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

Question 31

Globalization is less state-centered than is internationalization.

Question 32

All other things being equal, increased imports will decrease a country?s GNP.

Question 33

Lutheranism, Calvinism and capitalism all place an emphasis on the individual.

Question 34

The Peace of Westphalia substantially increased the power of the Roman Catholic Church.

Question 35

The idea behind comparative advantage was that every country should be self-sufficient industrially and agriculturally.

Question 36

The Japanese government takes a laissez -faire attitude regarding Japanese industry.

Question 37

The goals of the World Trade Organization (WTO) have, in general, not been easy to achieve.

Question 38

Most Third World countries made wise investment decisions with the money they borrowed in the 1970s and 1980s.

Question 39

Economic liberalism holds that global interdependence is a logical consequence of the international expansion of capitalism.

Question 40

Technology is becoming a less and less important part of economic expansion.

Question 41

What is meant by the term political economy? Discuss how the work of Adam Smith, David Ricardo, and other classical economists relates to the definition you provide.

Question 42

Examine the historical and philosophical roots of the development of capitalism, including its global spread.

Question 43

In what ways did culture and capitalism shape each other? What has been the end result of this interaction?

Question 44

What was mercantilism and how did it function? How and why did capitalist market understandings come to replace it? What philosophies and philosophers were important in this process?

Question 45

What contributions did Adam Smith, David Ricardo, and Karl Marx make to classical political economy? In what aspects did they agree and disagree?

Question 46

Examine and assess the globalization of capitalism from the early days of imperialism to the present.

Question 47

What are the components of Gross National Product (GNP)? How does it understate aggregate production in Third World countries where substantial economic production may be consumed directly and thus not reach markets where it can be measured? Finally, is per capita income (PCI) a good measure of level of living people enjoy or are the data skewed, given substantial differences in the distribution of income especially in Third World countries?

Question 48

What is the North-South divide? What are the varying explanations of its causes? What have been its consequences? What does the South want from the North and what will the future likely hold for the South? Why?

Question 49

Adam Smith in The Wealth of Nations states: ʺWealth does not consist in money, or in gold and silver; but in what money purchases, and is valuable only for purchasing.ʺ Ask author - What is the question here?

Question 50

Which do you consider to be the more important contribution to the security of a state -its economy or its military? How are the two related?