Question 1

What is credit money?

Accepted Answer

Credit money refers to money whose value is not derived from any intrinsic value or guarantee that it can be converted into valuable goods (like gold or silver), but rather from a trust in the issuer, typically not being legally redeemable for anything by the issuer.

Question 2

How does debt money actually become worth something?

Accepted Answer

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Question 3

Karl Polanyi argued that the market:

Accepted Answer

Karl Polanyi argued that unregulated markets could be destructive to labor and the environment, emphasizing the need for societal and governmental regulations to mitigate these effects. He critiqued the idea of a self-regulating market, suggesting that without intervention, markets could harm society.

Question 4

When particular commodities such as cotton are analyzed, what do you learn about the application of neoliberal policies in the United States in practice?

Accepted Answer

American cotton producers have historically received significant government subsidies, which contradicts the neoliberal ideal of minimal government intervention in markets. These subsidies have been a form of financial support to help make American cotton competitive on the global market.

Question 5

What material symbol defines what is important in life for most people in Europe and the United States?

Accepted Answer

Money is often considered a primary symbol of what is important in life for many people in Europe and the United States, reflecting the significance of economic success and financial stability in these cultures.

Question 6

Much of the economic growth in core countries over the past fifty years is a result of what key process?

Accepted Answer

The transformation of social capital activities into market activities has been a significant factor in economic growth, as it involves monetizing activities that were previously non-market, thereby expanding economic output and productivity.

Question 7

Each time you charge something on a credit card, you have created:

Accepted Answer

The answer of Each time you charge something on a...

Question 8

The purpose of the World Trade Organization is to:

Accepted Answer

The World Trade Organization (WTO) aims to facilitate and ensure the free flow of goods, services, and trade between countries, promoting global economic cooperation and reducing trade barriers.

Question 9

Neoliberalism takes all BUT which of the following as core principles?

Accepted Answer

The answer of Neoliberalism takes all BUT which of the...

Question 10

Economic crises are:

Accepted Answer

Economic crises are not unusual; they have occurred throughout history in various forms, such as stock market crashes, banking crises, and periods of hyperinflation, affecting economies worldwide.

Question 11

Capital conversion is the process by which:

Accepted Answer

Capital conversion involves transforming nonmonetary resources (like land, buildings, or equipment) into capital, which can be easily traded or sold in the market. This process is essential for businesses to liquidate physical assets into cash or other forms of assets that are more readily marketable.

Question 12

According to Robert Putnam, the main reason for a decline in social capital in the United States is:

Accepted Answer

The replacement of a civic-minded generation with less active citizens is the main reason for a decline in social capital in the United States, according to Robert Putnam.

Question 13

One advantage of inflation is that:

Accepted Answer

Inflation reduces the real value of money over time, meaning that the actual purchasing power of money decreases. For borrowers, this means the real value of the money they owe is less than when they initially borrowed it, making it cheaper in real terms to pay back debt.

Question 14

Simply put, economic systems are about:

Accepted Answer

Economic systems encompass the exchange of goods for money, the rules, mechanisms, and relationships that enable people to obtain what they need and want, and the distribution of goods and services.

Question 15

The Mount Pelerin Society argued that:

Accepted Answer

The Mount Pelerin Society, founded in 1947 by Friedrich Hayek and others, advocated for classical liberalism and argued that limited government intervention and regulation in the economy would best promote economic growth and prosperity.

Question 16

Political capital is defined as:

Accepted Answer

The answer of Political capital is defined as:
...

Question 17

Why is perpetual economic growth necessary in a modern market economy?

Accepted Answer

Because the constant creation of debt money requires the creation of additional money to cover interest payments.

Question 18

How does 'commodity money' differ from 'fiat money'?

Accepted Answer

Commodity money is backed by a physical commodity with intrinsic value, such as gold or silver, whereas fiat money has value primarily because a government declares it legal tender, not because it is backed by physical commodities.

Question 19

In the United States, the number of people who have taken out student loans to pay for college is about:

Accepted Answer

As of my last update in 2023, approximately 40 million people in the United States have taken out student loans to finance their college education, reflecting the widespread reliance on borrowed funds to access higher education.

Question 20

Wall Street is about finance, that is:

Accepted Answer

Wall Street is primarily associated with finance and investment, focusing on the concept of using money to make more money through various investment strategies and financial services.

Quiz 2: Globalization, Neoliberalism, and the Nation-State