Question 1

Neoliberals generally argue that state intervention in economic activity should be minimized.

Accepted Answer

Neoliberals advocate for minimal state intervention in the economy, emphasizing free markets, deregulation, and privatization as means to promote economic growth and efficiency.

Question 2

The people of Parma, Michigan welcomed the hog-farming operation because it provided a number of new jobs.

Accepted Answer

The people of Parma, Michigan, were largely opposed to the hog-farming operation due to concerns over environmental impact and quality of life issues, such as odor and pollution, rather than welcoming it for job creation.

Question 3

According to the author, what contributed to the rise of the Iraqi insurgency following the 2003 U.S. invasion?

Accepted Answer

The answer of According to the author, what contributed to...

Question 4

According to Karl Polanyi, unrestricted and unregulated market practices would help develop a freer and more creative society.

Accepted Answer

Karl Polanyi argued that unrestricted and unregulated market practices would lead to social dislocation and environmental degradation, not a freer and more creative society. He believed in the need for social and environmental protections against the excesses of the market.

Question 5

The recession that began in 2007 was due to a slowdown in economic growth.

Accepted Answer

The recession that began in 2007 was due to a financial crisis, not a slowdown in economic growth.

Question 6

Paper money has been used as a form of currency since around 5000 BC.

Accepted Answer

The first known use of paper money can be traced back to China during the Tang Dynasty around the 7th century AD, not as early as 5000 BC.

Question 7

How can governments avoid responsibility for domestic environmental concerns?

Accepted Answer

Governments can avoid responsibility for domestic environmental concerns by displacing regulatory power onto global governance institutions such as the WTO. This allows them to shift the burden of environmental regulation and enforcement to a higher, international level, potentially diluting their direct accountability for domestic environmental issues.

Question 8

Contemporary market practices encourage the constant transformation of social and political capital into economic capital.

Accepted Answer

Contemporary market practices, especially in the context of neoliberal economies, often emphasize the conversion of various forms of capital—such as social connections, influence, and political power—into economic gain. This is evident in practices like networking for business opportunities, lobbying for favorable regulations, or leveraging brand influence for financial success.

Question 9

The housing market collapse had its roots in

Accepted Answer

The answer of The housing market collapse had its roots...

Question 10

To maintain the growth of the money supply, the output of goods and services needs to constantly increase.

Accepted Answer

The quantity theory of money states that the money supply multiplied by the velocity of circulation is equal to the price level multiplied by real output. Therefore, if the money supply is to grow, real output must also grow.

Question 11

Free trade is one part of which economic perspective?

Accepted Answer

Neoliberalism strongly advocates for free markets and minimal government intervention in the economy, which includes support for free trade.

Question 12

The problem with simply creating more and more money is that the money, by itself, is worthless.

Accepted Answer

The value of money is not in the physical currency itself but in its purchasing power, which can be eroded by inflation if too much money is created without a corresponding increase in goods and services.

Question 13

When you buy a car, which of these costs is externalized?

Accepted Answer

The cost of a public road system is externalized when you buy a car because it is a cost borne by society at large, not directly by the buyer or seller of the vehicle.

Question 14

Governments balance the competing demands of citizens and corporations by doing all BUT ONE of the following:

Accepted Answer

Governments typically do not seek to identify government or private entities to make new policy as a way to balance demands; rather, they create policies themselves or through established legislative processes.

Question 15

More than forty of the richest institutional entities in the world are corporations, not nation-states.

Accepted Answer

Many of the world's wealthiest entities are indeed corporations, with their revenues surpassing the GDP of many nation-states, highlighting the significant economic power and influence these corporations hold globally.

Question 16

For most people in the United States, money is the primary means of obtaining what they need and want.

Accepted Answer

In the United States, the economy operates on a monetary system, meaning that money is the primary medium through which goods and services are exchanged. This allows individuals to purchase necessities and luxuries.

Question 17

In 1971 the U.S. finally moved to a:

Accepted Answer

In 1971, the U.S. moved to a fiat money system, abandoning the Bretton Woods system which was a form of the gold exchange system. This meant that the value of the U.S. dollar was no longer tied to gold, but rather was determined by the government's declaration that it had value.

Question 18

What is the biggest difficulty in attempting to regulate the modern economy?

Accepted Answer

Increased regulation can indeed affect economic growth by potentially stifling innovation, increasing costs for businesses, and reducing efficiency in the market.

Question 19

Once an economy allows people to make money with money, perpetual economic growth becomes a necessity.

Accepted Answer

In economies where capital can be used to generate more wealth (e.g., through investment), there is a need for continuous economic growth to sustain the returns on investments, manage debt, and support expanding financial systems. Without growth, the system faces increased risks of recession, unemployment, and financial instability.

Question 20

The annual costs associated with automobile fatalities in the U.S. are an example of:

Accepted Answer

Market externalities are costs or benefits that affect a party who did not choose to incur that cost or benefit. The annual costs associated with automobile fatalities in the U.S. are an example of negative externalities, as they represent costs to society (such as medical expenses, lost productivity, and emotional distress) that are not directly borne by the individuals involved in automobile accidents.

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