Question 1

The International Bank for Reconstruction and Development (IBRD) focuses on __________, whereas the International Development Association (IDA) focuses on __________.
A) middle-income countries and poorer countries considered to be a good risk in terms of repaying loans; the poorest countries, who may have considerable difficulty paying back any aid
B) the poorest countries, who may have considerable difficulty paying back any aid; middle-income countries and poorer countries considered to be a good risk in terms of repaying loans
C) middle-income countries who are considered to be a good risk; lower-income countries who are considered to be a good risk
D) lower income countries who are considered to be a good risk; lower-income countries who are considered to be a poor risk

Accepted Answer

The IBRD focuses on lending to middle-income countries and poorer countries that are considered to be a good risk in terms of repaying loans, while the IDA focuses on providing aid to the poorest countries, who may have considerable difficulty paying back any aid.

Question 2

An economic effect whereby an increase in spending (for example, of funds provided to a country by a donor) produces an increase in national income and consumption greater than the initial amount spent is called the
A) untied aid.
B) multiplier effect.
C) export-led growth effect.
D) network effect.

Accepted Answer

The scenario described in the question is known as the multiplier effect, whereby an initial increase in spending leads to a more significant increase in national income and consumption due to the additional rounds of spending that occur as a result. As each recipient of the initial spending goes on to spend part of their income, the effect multiplies throughout the economy.

Question 3

The development concept that pushes for the state to accumulate capital, direct investment, and provide legal, administrative, and educational infrastructure is called
A) the developmental state.
B) the free market.
C) state socialism.
D) the invisible hand.

Accepted Answer

The developmental state concept emphasizes the government's role in promoting economic development through actively investing in and guiding the economy, as opposed to leaving it entirely to the free market (B) or to state socialism (C), which involves complete government ownership and control of all property and resources. The invisible hand (D) is a concept from free market economics that suggests individuals acting in their own self-interest will benefit society as a whole, but it does not relate specifically to the idea of government-led economic development.

Question 4

The success of China gives further support to
A) the developmental state concept.
B) protectionism.
C) the Washington Consensus.
D) export led growth.

Accepted Answer

The answer of The success of China gives further support...

Question 5

Which of the following is not an important function of the World Bank?
A) Economic policy recommendations.
B) Lending programs.
C) Peacekeeping forces.
D) research on development issues.

Accepted Answer

The World Bank does not have any peacekeeping forces. Its main functions include providing economic policy recommendations, implementing lending programs, and conducting research on development issues.

Question 6

Which country has the second highest percentage of voting shares at the World Bank?
A) Japan
B) Germany
C) United States
D) France

Accepted Answer

Japan has the second highest percentage of voting shares at the World Bank, following the United States, which holds the highest percentage.

Question 7

The United States was willing to tolerate significant trade deficits with which of the following countries during the Cold War, due to the strategic importance of this (these) country(ies)?
A) Korea
B) Taiwan
C) Japan
D) Both options A and C are true.

Accepted Answer

During the Cold War, the United States was willing to tolerate significant trade deficits with Japan and Korea due to the strategic importance of these countries. In the case of Korea, the United States wanted to support its economy as a counterbalance to communist North Korea. In the case of Japan, the United States viewed its economic development as a key component of its security strategy in Asia. Taiwan was also an important U.S. ally during the Cold War, but it was not a significant trading partner at the time.

Question 8

Why do some criticize the voting structure in the World Bank?
A) They believe that the Bank remains a semicolonial organization in which the wealthy countries decide what will happen to the poor ones.
B) They believe that it gives the United States too much control.
C) They believe that it leads to increased capitalism.
D) They believe that it actually prevents development.

Accepted Answer

Critics argue that the voting structure in the World Bank favors wealthy countries, particularly the United States, and perpetuates a system of domination in which powerful countries decide the fate of poorer nations. This reflects the view that the Bank remains a semicolonial organization whose policies and practices are skewed in favor of the rich and powerful.

Question 9

An important and controversial practice of the World Bank is establishing an agreement so that the borrowing country must agree to a set of requirements. This practice is known as
A) conditionality.
B) tied aid.
C) structural adjustment.
D) foreign aid.

Accepted Answer

The practice described is commonly referred to as conditional lending or conditionality, whereby the World Bank imposes a set of conditions, policy reforms, and economic measures on the borrowing country as a requirement for receiving financial assistance. This mechanism has been a subject of controversy as it has been criticized for imposing neoliberal economic policies that may have adverse effects on the domestic economy and social welfare of the borrowing country.

Question 10

After the Asian financial crisis of 1997-1998, East Asian economics were exposed for corrupt close connections. The term coined by this corruption was
A) Asian Tigers.
B) crony capitalism.
C) The Asian Kittens.
D) Hong Kong capitalism.

Accepted Answer

The term coined for the corrupt close connections in East Asian economics after the financial crisis of 1997-1998 was "crony capitalism."

Question 11

Which of the following international governmental organizations has played a leading role in defining the "best practices" in development aid?
A) World Trade Organization
B) World Bank
C) International Monetary Fund
D) Inter-American Development Bank

Accepted Answer

The World Bank has played a leading role in defining the "best practices" in development aid, particularly through its publication of the World Development Report, which provides in-depth analysis and recommendations on various aspects of development. The other organizations listed have different mandates and do not focus primarily on development aid.

Question 12

An important problem in Russia during the post-communist phase has been the
A) weak industrial sector relative to a strong agricultural sector.
B) the weak dollar relative to a strong ruble.
C) absence of a strong, competent, and honest state authority.
D) weakening role of Russia in the UN.

Accepted Answer

Since the fall of communism, Russia has struggled with creating a strong, competent, and honest state authority. Corruption has been rampant, and political instability has hindered economic and social progress.

Question 13

A more recent development strategy is called structural adjustment. This refers to
A) the strengthening of the financial basis of a country's economy.
B) economic structuralist's attempt to break from dependency.
C) a state socialist approach to economic development.
D) a greater focus on food, shelter, and health care.

Accepted Answer

The answer of A more recent development strategy is called...

Question 14

Which of the following is not a part of the World Bank structure?
A) The International Monetary Fund
B) International Bank for Reconstruction and Development
C) The International Development Association
D) The International Finance Corporation

Accepted Answer

The International Monetary Fund is a separate organization from the World Bank and is not a part of its structure. The other choices listed are all part of the World Bank Group.

Question 15

In much of the post-World War II period, development aid focused on all of the following, except
A) infrastructure.
B) short-term alleviation of poverty.
C) technical know-how needed for development.
D) investment funds.

Accepted Answer

Development aid did focus on infrastructure, technical know-how, and investment funds in the post-World War II period. However, short-term alleviation of poverty was not a consistent priority until later years, as aid shifted towards a more sustainable development approach.

Question 16

In recent decades, the World Bank shifted to an approach that focused on food, shelter, and health care. This approach is referred to as the
A) export-led growth strategy.
B) developmental state approach.
C) most favored nation status.
D) basic human needs approach.

Accepted Answer

The basic human needs approach is an approach that focuses on providing for the basic needs of individuals, such as food, shelter, and health care. This approach is the one that the World Bank shifted to in recent decades, making choice D the correct answer.

Question 17

Liberals argue that the success of the Asian Tigers is evidence that the best approach to development is
A) export led growth.
B) import substitution.
C) protectionism.
D) based on the free market.

Accepted Answer

The success of the Asian Tigers, which refers to the rapid economic growth and development of several Asian countries like South Korea, Taiwan, Hong Kong and Singapore, is largely attributed to their adoption of free market policies. These policies included export-oriented industrialization, liberalization of trade and investment, and deregulation of markets. This approach allowed them to attract foreign investment, develop competitive industries, and become major exporters of manufactured goods. Therefore, based on the evidence of the Asian Tigers, the best approach to development is based on the free market.

Question 18

International aid has been criticized for all of the following except
A) aid going primarily to governments who may waste it through corruption or incompetence.
B) aid distorting markets and impeding economic reform.
C) aid often flowing out of the country quickly, diminishing the multiplier effect.
D) aid benefitting the receiving nation at the expense of neighboring countries.

Accepted Answer

International aid has been criticized for a variety of reasons including A, B, and C, but it has not been criticized for benefiting the receiving nation at the expense of neighboring countries. However, aid can sometimes create tensions between neighboring countries due to disparities in aid distribution, which could lead to conflicts.

Question 19

According to the Fair Labor Association's "Workplace Code of Conduct," which of the following ages is too young to work under any circumstance?
A) 15
B) 14
C) 13
D) All of the above are true.

Accepted Answer

The Fair Labor Association's "Workplace Code of Conduct" states that no person shall be employed at an age younger than 14 years old under any circumstance. Therefore, option C is the correct answer. Options A and B are incorrect as the code allows for children aged 15 to work in non-hazardous work that does not interfere with their education.

Question 20

The concept of good governance refers to
A) a government that is led by moral leaders.
B) a transparent, accountable, and effective government.
C) all types of democracies.
D) democratically elected governments.

Accepted Answer

Good governance can be defined as a government that is transparent, accountable, and effective in delivering essential services to its citizens. Transparency ensures that citizens have access to information about government activities, while accountability guarantees that those in power are held responsible for their actions. Effective governance means that governments can successfully deliver public goods and services while minimizing waste and corruption. Moral leadership and democracy are important components of good governance, but they are not sufficient in and of themselves.

Quiz 12: The Problem of Global Inequality

The International Bank for Reconstruction and Development (IBRD) focuses on , whereas the International Development Association (IDA) focuses on .

An economic effect whereby an increase in spending (for example, of funds provided to a country by a donor) produces an increase in national income and consumption greater than the initial amount spent is called the

The development concept that pushes for the state to accumulate capital, direct investment, and provide legal, administrative, and educational infrastructure is called

The success of China gives further support to

Which of the following is not an important function of the World Bank?

Which country has the second highest percentage of voting shares at the World Bank?

The United States was willing to tolerate significant trade deficits with which of the following countries during the Cold War, due to the strategic importance of this (these) country(ies) ?

Why do some criticize the voting structure in the World Bank?

An important and controversial practice of the World Bank is establishing an agreement so that the borrowing country must agree to a set of requirements. This practice is known as

After the Asian financial crisis of 1997-1998, East Asian economics were exposed for corrupt close connections. The term coined by this corruption was

Which of the following international governmental organizations has played a leading role in defining the "best practices" in development aid?

An important problem in Russia during the post-communist phase has been the

A more recent development strategy is called structural adjustment. This refers to

Which of the following is not a part of the World Bank structure?

In much of the post-World War II period, development aid focused on all of the following, except

In recent decades, the World Bank shifted to an approach that focused on food, shelter, and health care. This approach is referred to as the

Liberals argue that the success of the Asian Tigers is evidence that the best approach to development is

International aid has been criticized for all of the following except

According to the Fair Labor Association's "Workplace Code of Conduct," which of the following ages is too young to work under any circumstance?

The concept of good governance refers to