1- Econ 330 Final Review

Social Democrats in Germany are a party most similar to the _______in England and the _______in the U.S.

Christian Democrats, Republicans

Communists, Libertarians

Conservatives, Democrats

Labor, Democratic

Labor, Democratic

Which of the following countries has NEVER operated under a Communist Regime?

Cuba

Vietnam

Russia

United Kingdom

United Kingdom

"Fukuyama's theory is best described by which of the following?

Cold war ending and capitalism losing the battle as the best economic system.

WWII ending and the Nazi party advancing fascism.

The demise of the Soviet Union and advancing of capitalism across the globe.

The Hyperinflation of Germany and the end of WWI.

The demise of the Soviet Union and advancing of capitalism across the globe.

Which of the following countries would be best compared to understand the effect of different economic systems on economic outcomes?

Soviet Union vs. Cuba

China vs. Hong Kong

North vs. South Germany

East vs. West Korea

China vs. Hong Kong

Which type of incentive are most likely to be used to deal with the Principal Agent Problem in a market-based capitalist economy?

certificate of accomplishment

employer praise

threat of termination

cash bonuses

cash bonuses

Which of the following would be considered most important in defining a nation's economic system?

how wealth is distributed in the economy

the abundance of natural resources in the system.

how high the corporate tax rate is.

whether the state or individuals control property.

whether the state or individuals control

The principal-agent problem can be represented by which of the following scenarios?

the secretary of defense acts against the best interest of the President.

a CEO acts against the best interests of the board of directors.

none of the other choices

a stockholder acts against the best interest of the board of directors.

none of the other choices

Capitalism is best characterized by which of the following?

collective ownership of resources, decentralized information, material incentives, and democracy.

material incentives, centralized information, democracy, collective property rights with markets facilitating exchange between collectives.

individual property rights, material incentives, democracy, and decentralized information.

material incentives, centralized information, individual property rights, democracy.

individual property rights, material incentives, democracy, and decentralized information.

Which type of incentive is most likely to be use in a planned economy?

Moral

Punitive

Material

Adverse

Punitive

Suppose the United States has a Gini coefficient of 0.25 and Sweden has a Gini coefficient of 0.60Which of the following statements is true?

Without information on population, it is impossible to compare income distribution between countries

The distribution of income is more equal in Sweden.

The distribution of income is more equal in the United States.

Income distribution is changing faster in the United States

The distribution of income is more equal in the United States.

The U.S. economy grew an average of 3 percent per year from 1900-2015 due to technologicaland capital advances. Over this same time frame the population grew on average 1%. Which ofthe following types of growth and efficiency best represents the U.S. over this time frame?

intensive growth with dynamic efficiency

intensive growth with static efficiency

extensive growth with static efficiency

extensive growth with dynamic efficiency

intensive growth with dynamic efficiency

Countries that have grown intensively typically have _________when compared to countries that have only grown extensively.

Higher standards of living per person

Higher levels of technology

Greater dynamic efficiency

All other choices

All other choices

The idea that free-market capitalism is optimal and that institutions evolve over time based on individual action is supported by which of the following philosophers?

Yanos Kornai

All other choices

Karl Marx

Frederik Hayek

Samuel Huntington

Frederik Hayek

The Marxist view suggests that if a coffee thermos sells in the marketplace for $40 and the ownerof the business incurs $30 of costs to make the product, the owner of a business is entitled to______ upon selling the product.

$10 of surplus value

$0 of surplus value

$30 of surplus value

$40 of surplus value

$0 of surplus value

According to Marx, which of the following is true?

capitalism causes one social class to conflict with the other.

economic evolution is the result of a superstructure determined by the Proletariat.

the forces of production will eventually block the relations of productions.

the state becomes a means through which the political class confiscate the wealth of the social class.

capitalism causes one social class to conflict with the other.

The False Consciousness of Capitalism suggests a capitalist is:

inherently immoral seeking to enslave the population through force.

inherently immoral and purposely acts to extract surplus value from the masses.

not inherently immoral but acts as such due to the superstructure of society.

not inherently immoral but acts as such due to the greater power of the proletariat.

not inherently immoral but acts as such due to the superstructure of society.

Which country recently elected a new prime minister?

Bahrain

Portugal

Spain

Canada

Chile

Japan

Japan

Which of the following foreign policy areas are Trump and Biden most likely in agreement?

Reducing the number of troops in Afghanistan and the Middle East.

Returing to the 2015 Nuclear Accord with Iran

Troop withdrawl in Germany

NATO payments

Reducing the number of troops in Afghanistan and the Middle East.

According to the WSJ articles, which of the following is true?

South Africa has one of lowest levels of COVD-19 infections of any industrialized country.

Despite having a devestaing nitrate blast that killed thousands, Beruit has managed to keep real estate values increasing and their currency stable.

in order to facilitate warmer ties with UAE, among other middle east nations, Israel has agreed to accelerate plans to annex part of the west bank.

the combined output of all OECD countries fell in the first half of 2020

the combined output of all OECD countries fell in the first half of 2020

Which country's leadership has recently moved toward a reduction in violence with the Taliban?

Qatar

Afghanistan

Iran

Yemen

Afghanistan

In no more than 3-4 sentences, contrast the concept of Francis Fukayama's "End of History" and Samuel Huntington's "Clash of Civilization"

In the "End of History" Fukayama asserts that in the past, two competing economic systems vied for world power; Soviet Socialism/Communism and Western Liberalism/Capitalism. Forhim, the collapse of the Soviet Union and the expansion of the United States and other free-market democracies suggested the verdict was in, capitalism was the superior economic system. In contrast, Huntington's "Clash of Civilization" contends that the battles of the future will be over cultures such as Hindu, African, Islamic, Sinic, Orthodox, Buddhist, Latin,and Japanese, that transcend national boundaries. For him, national identity, defined by economic and political systems, is less important than the battle over cultures.

Using the table below evaluate the following statement in no more than 1-2 sentences.

"Capitalism is more conducive to generating good economic outcomes than socialism"

True, since trade policy and resource endowment are not correlated, the only factor that could be causing the good outcomes is the economic system.

Did the Hungarian Economist, Yanos Kornia believe that Hard or Soft budget constraints would be optimal for cost containment and efficiency? Which type was more likely in Socialism? Capitalism? In no more than 3-4 sentences answer these questions ?

He believed that Hard budget constraints are better for cost containment and that capitalism would therefore be more efficient than socialism.

In no more than 3-4 sentences and using the Marxian Theory of History, describe why the institution of slavery did not really exist for tens of thousands of years under Primative Communalism.

Slavery does not exist under primative communalism because production is so low that any attempt to expropriate value from another would preclude the slaves survival, and hence the value of the institution to masters. In essence, productivity must grow sufficiently to make slavery worthwhile to the master so he/she can actually get something for their coersive efforts.

In no more than 3-4 sentences explain how a worker's Marginal Revenue Product could increase causing him to have more income than other workers. Why might some object to any income inequality created by MRP differences?

A worker's MRP is determined by their productivity and the value of the product in the market place, so workers that are more productive and/or produce a higher valued product will make more income. The oppononents believe this inequality is unfair to the extent they had access to resources that they themselves did not contribute.

In no more than 3-4 sentences explain how today's Republicans and Democrats have different perspectives on capitalism. Is it a capitalist vs socialist debate? What figures in history are most significant to each party and do the views of these figures define the parties?

It is not a polarized debate since both parties to date tend to favor capitalism over socialism but Republicans favor a more market-centered approach and are concerned with too much power resting in the state. Democrats, in contrast tend to favor a more state-centered approach and are concerned with market power such as monopolies/oligopolies. Republicans are more likely to take their lead from Locke and Smith, Democrats from Marx and Hobbes. Both parties, however, are moderated and cannot be defined by the ideas of a few people or ideologies.

In no more than 3-4 sentences, explain why economic growth in the former USSR was impressive after WWII but began to subside each successive decade through the 1980s. What was the eventual outcome?

Rapid capital accumulation and corresponding industrialization allowed growth rates to soar. This was fueled by government ushered savings. Eventually, the marginal benefits of industrialization subsided and growth stalled leading to large-scale economic hardship and the abandonment of the Soviet Communist Model.

In no more than 3-4 sentences, explain the major differences between a Planned Socialist Economy and a Communist Economy. Are there any real world examples today?

Planned socialism has actually existed in the real world, communism has not. Instead, communism is a utopian outcome of socialism that Marx believed would inevitably result from economic evolution and revolution. Some nations such as North Korea and Cuba identify as communist but are for practical purposes socialist in their behavior.

Which of the following is least accurate regarding COVD-19 in the U.S and Europe from June to the present?

The EU now has higher case rates than the U.S.

Which of the following countries has recently been experiencing high inflation, a dramatic increase in its demand for U.S. dollar reserves, and sanctions imposed on it's leadership by the Trump Administration?

Iran

Which of the following is a typical goal of capitalism?

Equality of opportunity

Mercantilism is best represented by which of the following?

Colonization of the Americas by European powers in the 15th century

According to Mises and Hayek's, planned socialism is inferior to free-market capitalism due to its:

Inability to produce enough information for efficient economic decision-making

Markets pursue an efficient allocation of resources in which of the following ways?

When there are surpluses, sellers compete, causing prices to drop

Government intervention in a capitalist system is often justified based on:

All other choices

Negative externalities

Positive externalities

Monopoly power

The moral philosopher most influential in the American style of economics and politics is?

John Locke

According John Maynard Keynes:

The capitalist system is unstable, but government can use activist policies to manage it

The Soviet system of central planning was very successful in which of the following ways?

Space exploration

Government control over the major industries is usually referred to as:

Commanding Heights

"The ABCs of Communism" represents:

A book whose primary objective was to inspire support for communism among workers

Planned Socialism typically involves:

State or collective ownership of resources and a centralized locus of distribution

The Soviet system was most like the U.S system in which of the following ways?

Material rewards for more productive managers

Socialism can be best defined as:

An economic system that involves state or collective ownership of resources and a centralized means of distribution

Under planned socialism which of the following would the Central Planning Board most prefer?

Vertical but no horizontal trust

Which of the following is a typical goal of socialism?

Equality of consumption

Which of the following characteristics of the Anglo Model would a minority-share investor find appealing?

the potential for a hostile takeover should the executives mismanage the company

profit sharing for workers

widely held stock available on a major stock exchange

high market capitalization

all of the others

Which of the following would be most important for a capitalist country to encourage investment in a broad array of new technologies?

Strong venture capital markets

One of the primary benefits of the corporate form of ownership is?

as a stockholder you cannot be sued personally for the obligations of the business.

Which of the following would be least consistent with an Anglo-Capitalist country?

minimal disclosure of corporate accounting

Common law is most associated with?

Judicial precedent

All but which of the following represent a typical justification for deregulation?

to advantage profiteering businesses at the expense of consumers.

Which of the following least reflects the historical roots that spawned the first industrial revolution in Europe?

The American Revolution

Compared to the Anglo Model, European Model countries tend to have a _______________gap between what employers pay workers and the worker's take-home pay. They also tend to have_________ worker and ____________shareholder control over company decision-making.

reater, greater, lesser

Which of the following could provide one EU country an advantage over another EU country in terms of governing influence?

population

Which of the following is most accurate regarding the alliances that eventually led to the formal formation of the European Union?

It began as a common market between six european nations.

Which European Union governing body would NOT expect its members to pursue the interest of all EU nations?

European Council

Which of the following are standards set by the European Union to ensure member countries maintain a minimum level of financial health?

Fiscal deficits of more than 3%

Adoption of the Euro as each nation's primary currency

debt to GDP ratio of greater than 60%

none of the others

Compared to a worker in the U.S., a worker in a European Model country would be less likely to have which of the following:

full-time work

The European model is most distinctive from the Anglo model in which of the following ways?

greater government involvement in economic decisions

Which of the following did NOT evolve from the steel and coal common markets created after WWII in Europe?

European Central Bank