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A. Were often restructured by the dominant country to extract raw materials
D. Provided captive markets for the colonizer’s exports
Colonies (select all that apply)
A. Were often restructured by the dominant country to extract raw materials
B. Saw little impact on local political governance from colonizers, despite the economic changes
C. Are today the source of much of the portfolio investment in MDCs
D. Provided captive markets for the colonizer’s exports
C. Witnessed the grim working conditions and abject poverty of millions of workers during the industrial revolution
Karl Marx (select all that apply)
A. Agreed with Adam Smith that markets should be run by the “invisible hand”
B. Moved to the United States after his ideas were rejected in Europe, running for Congress in 1812
C. Witnessed the grim working conditions and abject poverty of millions of workers during the industrial revolution
D. Was in favor of imperialism, as he thought it set the groundwork for development in colonized countries
B. A core dominant country generally controlled the political and economic lives of foreign peoples
D. Colonies provided cheap labor and resources, and served as markets for the colonizers goods
E. Significant wealth and resources typically flowed out of the colonies, with relatively little capital flowing back in
Under colonialism (select all that apply)
A. Colonizing countries for centuries worked to develop local colonies, generally showing little progress because they lacked of political control
B. A core dominant country generally controlled the political and economic lives of foreign peoples
C. Mercantilist trade policies by the colonized peoples frustrated the Triangular Trade
D. Colonies provided cheap labor and resources, and served as markets for the colonizers goods
E. Significant wealth and resources typically flowed out of the colonies, with relatively little capital flowing back in
C. A fixed exchange rate system that set each country’s currency values in terms of gold, facilitating trade and investment
What was the gold standard?
A. The British Navy, known as the “gold standard” on the high seas
B. Brazil’s ending of slavery in 1888, which was undertaken after huge British investments
C. A fixed exchange rate system that set each country’s currency values in terms of gold, facilitating trade and investment
D. The Chinese desire for superior opium (known as “golden opium”)
C. Governments should regulate trade to advance national interests and power
Mercantilists (economic nationalists) believe:
A. All trade should be shut off and the state should be self-sufficient
B. Mercantile exchanges should not include agricultural goods
C. Governments should regulate trade to advance national interests and power
D. Trade should be completely unregulated/free
A. Is a term that has been used in the United States to refer to a preference for a more active state role in the economy
E. Has a classical meaning tied to open markets, supply and demand, free trade, and the pursuit of individual self-interest
Liberalism (select all that apply)
A. Is a term that has been used in the United States to refer to a preference for a more active state role in the economy
B. Is an outdated philosophy based on protectionist trade strategies
C. Is synonymous with mercantilism
D. Is a political economic idea centered on government ownership of the means of production E. Has a classical meaning tied to open markets, supply and demand, free trade, and the pursuit of individual self-interest
1 - B 2 - A 3 - C
Match the "products" that came out of each region during the Triangular Trade
Africa
Americas
Europe
A. Primary products such as sugar, tobacco, and cotton B. Slaves, gold C. Guns, Cloth
A. Mercantilist
European colonial economic policies can be described as:
A. Mercantilist
B. Classical Liberal
C. Contemporary Liberal
D. Socialist
D. Capitalist systems are exploitative and empower the rich (“to be rich is to be born rich”)
E. Believed that governments in capitalist countries could not be trusted because the state would always defend wealthy interests
Marxists believe:
A. Communist states, such North Korea, have been highly successful and continue to show the superiority of this lens
B. The only viable strategy for the state is liberalism (“self-interest is the only alternative”)
C. Capitalism will evolve from socialism (“socialists will shine the light on open markets”)
D. Capitalist systems are exploitative and empower the rich (“to be rich is to be born rich”)
E. Believed that governments in capitalist countries could not be trusted because the state would always defend wealthy interests
A. Adam Smith
A founding thinker for classical liberalism is:
A. Adam Smith
B. Franklin Roosevelt
C. Karl Marx
D. Donald Trump
C. It was easy for Great Britain to call for open markets and free trade after the country had used mercantilism to build a powerful economy
Alexander Hamilton and Friedrich List pointed out:
A. Germany and the United States were generally the most liberal economies in the 19th century, not Great Britain
B. Great Britain’s development into the world’s most powerful economy proves the liberal arguments of Adam Smith
C. It was easy for Great Britain to call for open markets and free trade after the country had used mercantilism to build a powerful economy
D. WWI, WWII, and the Great Depression strengthened the case for laissez-faire capitalism
A. The state owns and controls key means of production
In a socialist system: (select all that apply)
A. The state owns and controls key means of production
B. Governments regulate through low tariffs, but often keep floating exchange rates
C. Countries try to become dependent on a few products
D. Most of the economy is privately held, and the government is a weak watchdog Solution
B. 10-15 million
How many people were forcibly removed from Africa as slaves during the 300+ years of Triangular Trade:
A. 1.2 billion
B. 10-15 million
C. 1-2 million
D. 250,000-500,000
A. States controlling trade, generally protecting home markets while seeking to sell products abroad
Mercantilism includes (select all that apply):
A. States controlling trade, generally protecting home markets while seeking to sell products abroad
B. Agricultural production, as seen in many LDCs
C. The philosophy that countries should be fully open to both FDI and portfolio investment
D, The philosophy of slavery opponents, who decried the searing human rights abuses
D. Open Markets, freer trade, and free flowing capital with some governmental management
The liberal world economic order sought by the United States and other Western countries after WWII was based on:
A. Socialism, to provide for the general welfare of people equally
B. Heightened protectionism to stabilize the international economic system
C. Mercantilist policies based on the ideas of Franklin Roosevelt
D. Open Markets, freer trade, and free flowing capital with some governmental management
A. The COVID-19 pandemic
B. The Great Depression
E. The Great Recession
Examples of significant economic downturns where states worked to manage capitalism and maintain “aggregate demand” include (select all that apply, there are one to four possible correct answers):
A. The COVID-19 pandemic
B. The Great Depression
C. The global economic expansion after WWII (1950s to 1970s)
D. The Roaring 1920s
E. The Great Recession
D. Criticized post-WWII Keynesian policies, instead promoting deregulation of business and less government intervention in the economy
Neoliberalism:
A. Is the merging of socialist and liberal ideas in Scandinavian countries, which has led to significant social welfare
B. Was rejected by Ronald Reagan in favor of “America First” economic policies
C. Rejected the Washington Consensus policies of the IMF in favor of increased banking deregulation
D. Criticized post-WWII Keynesian policies, instead promoting deregulation of business and less government intervention in the economy
B. During economic downturns and crises, governments should intervene to stimulate employment and overall (aggregate) demand
While associated with the liberal tradition, Keynes argued that:
A. Countries should robustly use the strategies of all ideas, including communism
B. During economic downturns and crises, governments should intervene to stimulate employment and overall (aggregate) demand
C. Liberalism would never work unless countries gave up their militaries and banned war
D. Socialism was needed to improve upon the outcomes of mercantilism and protectionism
D. World Trade Organization (WTO)
The General Agreement on Tariffs and Trade (GATT) was the precursor to the:
A. United Nations (UN)
B. European Union (EU)
C. International Monetary Fund (IMF)
D. World Trade Organization (WTO)
C. Help stabilize a country's economy when the country has severe budgetary imbalances
The primary role of IMF loans is to:
A. Lessen World Bank influence in developing countries
B. Assist countries pursuing import substitution industrialization through high tariff promotion
C. Help stabilize a country's economy when the country has severe budgetary imbalances
D. Provide loans for democratization in developed countries
A. Bretton Woods system
The World Bank and the IMF are part of what post-World War II system?
A. Bretton Woods system
B. New Triangular Trade Alliance (NTTA)
C. Global Insurance system
D. WTO alliance
D. Joined liberal international economic institutions, but have also owned some industries and provided generous safety nets
In the post-WWII era, the Scandinavian countries:
A. Joined the communist bloc, allying closely with China and the Soviet Union
B. Were by far the most liberal, rejecting state involvement in the economy and pressing for unfettered markets
C. Used significant military spending to strengthen their economies and stimulate aggregate demand
D. Joined liberal international economic institutions, but have also owned some industries and provided generous safety nets
D. Is tied to the idea that classical liberalism is volatile and prone to recessions and depressions, so states should try to manage capitalism and maintain “aggregate demand”
”Contemporary liberalism” (often associate economically with the ideas of John Maynard Keynes):
A. Is the same as the “Neo-Liberalism” promoted by Ronald Reagan
B. Is focused on the use of significantly less government spending to stimulate aggregate supply, with states privatizing key industries
C. Is synonymous with Adam Smith’s “Invisible Hand”
D. Is tied to the idea that classical liberalism is volatile and prone to recessions and depressions, so states should try to manage capitalism and maintain “aggregate demand”
E. Is the main point of socialism as outlined by Marx
B. The IMF
What international organization did John Maynard Keynes help create in the aftermath of the Great Depression:
A. NATO
B. The IMF
C. The U.S. Federal Reserve
D. The Group of 20 (G-20)
A. Markets are inherently volatile
D. Large scale unemployment can develop in volatile markets
E. Nothing can stop a downward spiral and growing unemployment in a depressed economy unless the government steps in with public spending to replace a lack of private spending
Keynes main three ideas were including:
A. Markets are inherently volatile
B. There are political downsides (even including revolution) if states take steps to address severe economic downslides
C. Depressions show that bureaucrats rely on too much regulation and government spending
D. Large scale unemployment can develop in volatile markets
E. Nothing can stop a downward spiral and growing unemployment in a depressed economy unless the government steps in with public spending to replace a lack of private spending
A. Confidence and optimism in the economy, which sparks economic growth
The “animal spirits” are:
A. Confidence and optimism in the economy, which sparks economic growth
B. The “sticky wages” that end depressions
C. Politicians' abilities to maintain “aggregate demand”
D. Government officials overspending during depressions, causing unnecessary waste
D. More government spending to increase aggregate demand
What is Keynes’ approach to stimulating a depressed economy?
A. Free trade agreements to open markets for local businesses
B. Cutbacks in public spending to decrease deficits and improve efficiency
C. Cutbacks in government regulation to allow the “invisible hand” to allocate resources more efficiently
D. More government spending to increase aggregate demand
C. Millions in society, for the mistakes of a few, causing social unrest
According to Keynes volatile markets can punish:
A. Only those who have made mistakes, showing market efficiency
B. Military planners, who must embrace volatile social reactions
C. Millions in society, for the mistakes of a few, causing social unrest
D. The environment, because regulations tend to strengthen
A. John Maynard Keynes
The stimulus spending during the “Great Recession” in the United States was based on the ideas of:
A. John Maynard Keynes
B. Friedrich Hayek
C. Karl Marx
D. Ronald Reagan
C. Is criticized on the left for its alleged disregard for environmental and worker standards
D. Is criticized on the right for its ability to impinge on the decisions of sovereign states
The WTO (select all that apply):
A. Has been shut down because of criticisms from the left and right
B. Has been replaced by the GATT, which has lessened trade disputes considerably
C. Is criticized on the left for its alleged disregard for environmental and worker standards
D. Is criticized on the right for its ability to impinge on the decisions of sovereign states
A. Countries often shifted to new steps to protect their economies, such as by using non-tariff barriers
C. Average global tariffs were lowered from 22% to 5% over roughly 50 years
D. States agreed to lower their tariffs and apply the same tariff rate to all members of the GATT (known as the most-favored nation system)
Under the GATT (select all that apply, there are one to four possible correct answers):
A. Countries often shifted to new steps to protect their economies, such as by using non-tariff barriers
B. All relevant issues for liberalizing trade were undertaken, including protecting intellectual property rights and regulating banking and insurance
C. Average global tariffs were lowered from 22% to 5% over roughly 50 years
D. States agreed to lower their tariffs and apply the same tariff rate to all members of the GATT (known as the most-favored nation system)
D. Free trade leads to competition which can cost workers their jobs
Those that caution against free trade generally argue:
A. Countries can be forced to significantly strengthen (raise) their environmental and labor standards to compete with countries where these standards are lower
B. Capitalism always trumps more open trade
C. Free trade can lead to functionalism, neo-functionalism, and war
D. Free trade leads to competition which can cost workers their jobs
B. Free trade promotes interdependence among countries and helps maintain international peace
C. Open trade fosters lower prices for consumers
Arguments in favor of free trade often include each of the following: (select all that apply)
A. Infant industries are the only industries where open markets are effective
B. Free trade promotes interdependence among countries and helps maintain international peace
C. Open trade fosters lower prices for consumers
D. Countries can use trade barriers to better protect State Owned Enterprises (SOEs) under free trade policies
D. Opening economies to free trade, cutting back state budgets (fiscal responsibility), and privatizing state-owned enterprises is the best strategy for the developing world
Neoliberal advocates of the “Washington Consensus” argue that:
A. The U.S. should dictate sensible policies to poorer countries to help them develop
D. Opening economies to free trade, cutting back state budgets (fiscal responsibility), and privatizing state-owned enterprises is the best strategy for the developing world
C. Europe has the responsibility to give assistance to the poorer countries since it was primarily Europeans that had undermined their economies
D. The World Bank should offer vast loans to developing countries as reparation for colonial exploitation
C. Economic sanctions or a withdrawal of trade concessions by the winning state
Losing a case through the WTO disputes settlement mechanism could lead a country to face:
A. A full trade embargo by the United States
B. Being forced to rewrite laws declared unconstitutional by the WTO
C. Economic sanctions or a withdrawal of trade concessions by the winning state
D. Military force
D. Is when MNCs trade with their own affiliates in different countries, producing components and assembling products along their supply chain
Intrafirm trade:
A. Was argued by David Ricardo as incompatible with comparative advantage
B. Does not count in global trade statistics, leading many to call for higher corporate taxes
C. Is central to understanding Ricardo’s critique of Smith, and the foundation of absolute advantage
D. Is when MNCs trade with their own affiliates in different countries, producing components and assembling products along their supply chain
A. States should specialize in producing the goods which they produce most efficiently and trade for goods that other states produce most efficiently
The idea of comparative advantage is that:
A. States should specialize in producing the goods which they produce most efficiently and trade for goods that other states produce most efficiently
B Developing countries had advantages in industrialization, but they were overtaken by colonialism
C. If you have nukes, why not use them, this step will allow you to impose a stable world economy
D. Trade always has winners and losers, so countries should pursue mercantilist, closed market strategies to gain an absolute advantage
D. The creation of a trade dispute settlement mechanism with teeth, to resolve trade disputes amongst members
The creation of the WTO in 1995 included:
A. A weak mechanism to settle trade disputes, under which no penalties ever come about and cheating is flaunted
B. Disregard for the GATT agreements, restarting the liberalization of trade from scratch
C. All countries except the BRICS countries, because of illegal mercantilist practices
D. The creation of a trade dispute settlement mechanism with teeth, to resolve trade disputes amongst members
1 - C 2 - A 3 - B 4 - D
Match the protectionist policy measure with its definition:
Quota
Subsidy 3.Tariff
Regulations
A. Direct government payments to domestic producers
B. A tax on imports
C. A restriction on the number of goods that can be imported
D. Rules and standards that can create barriers to the importation of foreign goods
C. Adam Smith and David Ricardo
Which two thinkers are most closely associated with setting the classical liberal roots of open markets and free trade?
A. David Ricardo and John Maynard Keynes
B. Karl Marx and John Maynard Keynes
C. Adam Smith and David Ricardo
D. Adam Smith and Karl Marx
C. There are winners and losers with trade policies, and groups pressure governments to adopt policies beneficial to them
Why is trade policy “inevitably politicized”?
A. Because it is always easy for voters to understand trade policy
B. Prices are generally higher through FTAs (such as NAFTA), but can be lower with protectionist policies
C. There are winners and losers with trade policies, and groups pressure governments to adopt policies beneficial to them
D. Politicians stand to gain significantly if they adopt FTAs, but lose significantly if they shift to protectionism
C. Free trade without governmental interference will eventually benefit all economies in the international system by ensuring efficiency in the production and distribution of goods and services
Classical liberal trade theory holds the view that:
A. Adam Smith’s socialism will only come after a capitalist stage
B. Karl Marx was incorrect in arguing that countries have comparative advantages
C. Free trade without governmental interference will eventually benefit all economies in the international system by ensuring efficiency in the production and distribution of goods and services
D. Governments should continually protect their infant industries with trade barriers so that they can become competitive in the international arena
D. Trade increases overall employment and growth, and can shift jobs to where a country has comparative advantages
Proponents of free trade argue:
A. “Transition costs” do not exist in low-skilled areas where there is a comparative advantage
B. “Transition costs” only exist in high-skilled areas where there is a comparative advantage
C. Workers are overrepresented in most democracies
D. Trade increases overall employment and growth, and can shift jobs to where a country has comparative advantages
D. Trade liberalization
The removal or reduction of tariffs or quotas on the trading of specific goods to stimulate freer trade is known as:
A. Fiscal stimulus
B. Socialism
C. Neo-mercantilism
D. Trade liberalization
B. Countries can temporarily support the growth of infant industries to reshape their comparative advantage
Arguments in favor of protectionist policies include:
A. These policies are essential to absolute advantage as outlined by Smith
B. Countries can temporarily support the growth of infant industries to reshape their comparative advantage
C. The significant success of the European Union, which was founded on socialist policies
D. Protectionism is clearly evident in the core distinction between absolute and comparative advantage
A. Access foreign markets
B. Find the most qualified and inexpensive labor
D. Access abundant raw materials
MNCs build supply chains to (select all that apply):
A. Access foreign markets
B. Find the most qualified and inexpensive labor
C. Lobby states to adopt social welfare programs and protect workers’ rights
D. Access abundant raw materials
B. Fixed (or pegged) the value of their currency to the U.S. dollar, which was fixed to the price of gold
To stabilize currencies during the initial Post WWII era, countries:
A. Abolished the IMF and created the World Bank
B. Fixed (or pegged) the value of their currency to the U.S. dollar, which was fixed to the price of gold
C. Adopted the U.S. dollar or European euro as their local currency
D. Discouraged Free Trade Agreements, such as NAFTA
D. Their exports (often agricultural goods or other primary products) often do not bring in enough capital to pay for their imports (often finished goods)
Developing countries (LDCs) often face “declining terms of trade” because:
A. The IMF and World Bank strongly discourage them from benefitting from their comparative advantages, pushing them instead to industrialize through protected industries
B. IMF conditionality has led to a loss of their comparative advantage
C. The capital generated through exports (often finished products) exceeds the capital they spend on imports (generally agricultural and other primary goods)
D. Their exports (often agricultural goods or other primary products) often do not bring in enough capital to pay for their imports (often finished goods)
B. FDI is investing more in fixed assets (companies and real estate), as opposed to stocks and bonds (which is portfolio investment)
The difference between foreign direct investment (FDI) and foreign portfolio investment (FPI) is that:
A. FDI by MNCs has been virtually non-existent to date, while foreign portfolio investment by NGOs has made a tremendous impact
B. FDI is investing more in fixed assets (companies and real estate), as opposed to stocks and bonds (which is portfolio investment)
C. There is no difference, these terms mean the same thing
D. FDI has collapsed in the post-WWII era (to the point of inconsequence), while portfolio investment has soared
A. Capital (money)
For people and countries to develop and prosper, they need:
A. Capital (money)
B. To focus fully on the production of agricultural goods
C. Less Foreign Direct Investment (FDI) and fully protected domestic economies
D. Free market systems without any government involvement in the economy or private capital
B. The market determines the price of the currency
Floating exchange rates, which much of the world shifted to after 1971, differ from fixed exchange rates in that with floating exchange rates:
A. Protectionism is more apparent, as the state manipulates currency values
B. The market determines the price of the currency
C. The U.S. dollar or the European euro must be used in the transaction
D. The government decides the value of the currency
A. Bringing in new technology and upgrading local labor skills
B. Helping build physical infrastructure in a host country
C. Increasing competition in a host country, making its industries more efficient
D. Generating employment and economic growth in host countries
FDI can often help a country by (select all that apply):
A. Bringing in new technology and upgrading local labor skills
B. Helping build physical infrastructure in a host country
C. Increasing competition in a host country, making its industries more efficient
D. Generating employment and economic growth in host countries
World Bank - Lender generally for longer-term development projects across the world
WTO - Organization designed to foster more open international trade and settle trade disputes
IMF - Lender of last resort for countries that experience significant, but generally short-term, balance of payments problems
World Bank
WTO
IMF
A. Organization designed to foster more open international trade and settle trade disputes
B. Lender of last resort for countries that experience significant, but generally short-term, balance of payments problems
C. Lender generally for longer-term development projects across the world
A. In the past, largely stayed at home, in domestic banks and stock markets
B. Can be in the form of foreign direct investment, foreign portfolio investment, foreign aid, and remittances from migrants sending money back home
C. Today crosses borders at lightning speed, with over $6 trillion traded every day
D. Is another word for money
Capital (select all that apply):
A. In the past, largely stayed at home, in domestic banks and stock markets
B. Can be in the form of foreign direct investment, foreign portfolio investment, foreign aid, and remittances from migrants sending money back home
C. Today crosses borders at lightning speed, with over $6 trillion traded every day
D. Is another word for money
C. Privatization (sale to private owners) of state-owned enterprises (SOEs)
IMF Structural Adjustment Programs (SAPs) have called for:
A. Trade protectionism to shield infant industries
B. Large stimulus packages and increased government spending
C. Privatization (sale to private owners) of state-owned enterprises (SOEs)
D. Mercantilist oriented regulation in developing economies because of high poverty rates
C. A “race to the bottom,” with countries lowering labor and environmental standards in order to compete
One criticism of state efforts to attract international capital is that it can lead to:
A. The rise of populist leaders calling for stronger structural adjustment programs
B. Democratization
C. A “race to the bottom,” with countries lowering labor and environmental standards in order to compete
D. WTO violations by corrupt MNCs
A. Structural Adjustment Programs
Through _________________, the IMF and World Bank set a series of often stiff requirements when establishing an agreement with a borrowing country, pressing such steps as trade liberalization, fiscal responsibility, and privatization.
A. Structural Adjustment Programs
B. The GATT
C. The European Union
D. Foreign aid
A. Gains in lifting people out of poverty worldwide are expected to reverse in the short term because of COVID-19
C. 10% of the world's population lives on less than $1.90 per day, down from 36% in 1990
E. Most of the gains in lifting people out of poverty have been in two countries, China and India (especially China)
According to the most recent estimates (select all that apply, there are one to four possible correct answers):
A. Gains in lifting people out of poverty worldwide are expected to reverse in the short term because of COVID-19
B. Chinese citizens now enjoy higher per capita incomes than U.S. citizens
C. 10% of the world's population lives on less than $1.90 per day, down from 36% in 1990
D. The United States accounted for 62% of all global wealth in 2020
E. Most of the gains in lifting people out of poverty have been in two countries, China and India (especially China)
B. Life expectancy
E. Per capita income
F. Educational attainment
The UNDP’s Human Development Index (HDI) is based on three factors, including (select all that apply, there are one to four possible correct answers):
A. Legal protections for workers
B. Life expectancy
C. Gender equality
D. Access to health coverage
E. Per capita income
F. Educational attainment
A. In 2019 the bottom half of the world’s population held less than 1% of the world’s total wealth, while the top 1% held 45%
B. In 2000, the bottom half of the world’s population held less than 1% of the world’s total wealth, while the top 1% held 34%
Which of the following is TRUE (select all that apply, there are one to four possible correct answers)?
A. In 2019 the bottom half of the world’s population held less than 1% of the world’s total wealth, while the top 1% held 45%
B. In 2000, the bottom half of the world’s population held less than 1% of the world’s total wealth, while the top 1% held 34%
C. In 2019 the bottom half of the world’s population held less than 10% of the world’s total wealth, while the top 1% held 25%
D. In 2000, the bottom half of the world’s population held less than 10% of the world’s total wealth, while the top 1% held 64%
C. Twenty-five of the bottom thirty-two countries in infrastructure are in Latin America
According to the reading, which statement below is INCORRECT:
A. 22.8% of people in Botswana age 15-49 have HIV
B. Only 15.5% of people in India have access to improved drinking water
C. Twenty-five of the bottom thirty-two countries in infrastructure are in Latin America
D. Twenty-five of the top thirty countries with the lowest GDP per capita are in Africa
A. Almost all the LDCs are former colonies and faced conquest, racism, and colonialist mercantilism prior to independence
C. In 1945 there were 51 states in the newly created UN, and 142 newly sovereign states have joined since
Which of the following statements is TRUE (select all that apply, there are one to four possible correct answers)?
A. Almost all the LDCs are former colonies and faced conquest, racism, and colonialist mercantilism prior to independence
B. Latin American countries were the last to throw off the yoke of colonialism and gain independence
C. In 1945 there were 51 states in the newly created UN, and 142 newly sovereign states have joined since
D. Of the 161 LDCs, 41 were former colonies
B. Income per capita
One of the first and most common ways to measure development is:
A. Obesity levels
B. Income per capita
C. Taxes
D. Happiness
B. Latin American elites benefitted from high demand for the region’s mining and agricultural exports, buying manufactured products and luxury goods
C. The vast majority of people in Latin America suffered from the realities of the transatlantic economy and the liberal economic mantra of the time
D. The industrial revolution in Europe helped spur demand for Latin America’s primary product exports
During the 19th century (select all that apply):
A. Latin America emerged as one of the world’s most egalitarian regions after its wars for independence
B. Latin American elites benefitted from high demand for the region’s mining and agricultural exports, buying manufactured products and luxury goods
C. The vast majority of people in Latin America suffered from the realities of the transatlantic economy and the liberal economic mantra of the time
D. The industrial revolution in Europe helped spur demand for Latin America’s primary product exports
B. Business regulations and licenses
D. Bars on specific imports
E. Quotas
F. Tarrifs
Protectionist steps countries can take include (select all that apply, there are one to four possible correct answers):
A. Geographic barriers, such as rivers
B. Business regulations and licenses
C. IMF/World Bank “conditionalities”
D. Bars on specific imports
E. Quotas
F. Tarrifs
B. Was the Indian example of import substitution, with the government creating a lot of red tape (permits and licenses) to protect domestic industries
The License Raj:
A. Was the Indian example of structural adjustment, with the government liberalizing governmental regulations
B. Was the Indian example of import substitution, with the government creating a lot of red tape (permits and licenses) to protect domestic industries
C. Is a liberalizing trade deal between India and the United States signed between Prime Minister Modi and President Biden
D. Is an example of how the Indian government has avoided the corruption found in Latin America through efficient administration
A. 10 percent of GDP
Manufacturing in Africa accounts for:
A. 10 percent of GDP
B. 52 percent of GDP
C. 70 percent of GDP
D. 30 percent of GDP
B. Many Latin American leaders concluded that they should take forceful steps to encourage local production of manufactured goods
With the Great Depression:
A. Intellectuals strongly supported Latin America’s reliance on primary products
B. Many Latin American leaders concluded that they should take forceful steps to encourage local production of manufactured goods
C. European immigrants fled from Latin America and returned home
D. Latin America became a manufacturing powerhouse
A. Inflation has dropped dramatically and foreign investment has significantly increased
With “structural adjustment” in Latin America:
A. Inflation has dropped dramatically and foreign investment has significantly increased
B. All Latin American countries have embraced a new strategy, the middle income trap
C. The poor have been the biggest winners, with inequality significantly lessening
D. No MNCs have matured into powerful global firms
B. Relaxing government controls on currency and interest rates
C. Opening economies to foreign trade and investment
D. Selling state-owned enterprises
E. Reducing government spending
Neoliberal structural adjustment programs call for (select all that apply):
A. State-owned enterprises to be sold to cronies of the political elite
B. Relaxing government controls on currency and interest rates
C. Opening economies to foreign trade and investment
D. Selling state-owned enterprises'
E. Reducing government spending
A. Latin American countries eventually became dependent on overvalued exchange rates, debt, and printing money
B. Latin American states had to rely on imported technology and parts, which became difficult to pay for
C. Local industries received favorable tariff protections, preferences in government contracts, and significant government investments
D. Many “infant” industries became overstaffed and corrupt, producing inferior products because of a lack of competition
E. Latin America saw some economic success between 1930 and 1960, particularly during the global economic expansion after WWII
F. States built “infant,” often state owned industries which manufactured products to substitute for foreign imports
With import substitution industrialization (select all that apply):
A. Latin American countries eventually became dependent on overvalued exchange rates, debt, and printing money
B. Latin American states had to rely on imported technology and parts, which became difficult to pay for
C. Local industries received favorable tariff protections, preferences in government contracts, and significant government investments
D. Many “infant” industries became overstaffed and corrupt, producing inferior products because of a lack of competition
E. Latin America saw some economic success between 1930 and 1960, particularly during the global economic expansion after WWII
F. States built “infant,” often state owned industries which manufactured products to substitute for foreign imports
A. State-owned enterprises being sold to cronies of the political elite
B. Reduced spending on education, healthcare, infrastructure and other public goods
C. Small business owners being overwhelmed by international competition
D. Privatized industries reducing employment as they seek to compete
Some downsides seen with structural adjustment programs in LDCs include (select all that apply):
A. State-owned enterprises being sold to cronies of the political elite
B. Reduced spending on education, healthcare, infrastructure and other public goods
C. Small business owners being overwhelmed by international competition
D. Privatized industries reducing employment as they seek to compete
A. Is when countries are not able to reach higher income levels because they are held back by weak/corrupt institutions, poor infrastructure, sharp inequality, and other challenges
The middle income trap:
A. Is when countries are not able to reach higher income levels because they are held back by weak/corrupt institutions, poor infrastructure, sharp inequality, and other challenges
B. Is the newest strategy undertaken in Latin America, focusing on the middle class
C. Is why inflation dropped significantly in Latin America, and FDI increased
D. Has not been seen in Latin America, but is highly prevalent in Africa
A. Helped lead to the Latin American “debt crisis” of the 1980s, as countries borrowed money deposited by OPEC countries and continued their import substitution strategies
The OPEC driven oil price increases in the 1970s:
A. Helped lead to the Latin American “debt crisis” of the 1980s, as countries borrowed money deposited by OPEC countries and continued their import substitution strategies
B. Sparked significant economic growth in the 1980s in Latin America
C. Led to oil producers in Latin America initiating structural adjustment programs in the Southern Cone
D. Prompted the Washington Consensus to call for import substitution in Latin America, eventually leading to structural adjustment
B. Classical liberal arguments for open markets and free trade can be viewed with suspicion
C. Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high tech imports needed for development
For developing countries that mainly produce primary products, such as mining and agricultural goods (select all that apply):
A. Trade deficits do not develop because they have a monopoly over their competition
B. Classical liberal arguments for open markets and free trade can be viewed with suspicion
C. Persistently low and unpredictable export prices cannot generate the revenue for the expensive manufactured/high tech imports needed for development
D. Classic liberal trade theory is seen as the only solution
C. When a ruler or ruling elites treat the state as an extension of their own personal property or interests
Neopatrimonialism is:
A. How Mauritius has increased incomes by 600 percent since independence
B. How Rwanda has shown a remarkable recovery since the genocide in the late 1990s
C. When a ruler or ruling elites treat the state as an extension of their own personal property or interests
D. An extension of IMF structural adjustment programs in Africa
D. Promoting exports and protecting the economy by restricting imports
Mercantilist approaches to industrialization, seeking to establish desired trade balances and trade profiles, include:
A. Engaging in capital flows through U.S. Treasury Bills
B. Promoting all imports while restricting exports
C. Adopting IMF Structural Adjustment Programs, which emphasize closed market strategies
D. Promoting exports and protecting the economy by restricting imports
A. South Korea, Taiwan, Hong Kong, Singapore
Which countries were known as East Asia’s “four tigers,” following Japan with the export promotion strategy:
A. South Korea, Taiwan, Hong Kong, Singapore
B. Taiwan, South Korea, Vietnam, Indonesia
C. Taiwan, South Korea, Indonesia, Thailand
D. Taiwan, China, Vietnam, Thailand
C. Products are assembled with duty-free imported parts and then exported
In Export Processing Zones (EPZs):
A. Maquiladoras exist in tariff-protected enclaves
B. High tariffs allow for the time it takes to build efficient industries
C. Products are assembled with duty-free imported parts and then exported
D. Bureaucratic red tape undermines the export promotion strategy
A. It was signed by 11 countries to counter China’s growing strength and help set the rules of the economic road along the Pacific Rim
B. The Trump administration pulled the U.S. out of the agreement upon coming to office
E. It was hotly disputed by both the left and right wings of the U.S. political spectrum
What is true about the Trans-Pacific Partnership (select all that apply):
A. It was signed by 11 countries to counter China’s growing strength and help set the rules of the economic road along the Pacific Rim
B. The Trump administration pulled the U.S. out of the agreement upon coming to office
C. After going into force in 2012 it led to Japan passing China as East Asia’s largest economy
D. It excluded Japan and Vietnam, dooming its chances for effectiveness
E. It was hotly disputed by both the left and right wings of the U.S. political spectrum
A. Low cost loans
B. Undervalued exchange rates
C. Direct export subsidies
D. Protection of infant industries focused on exports
Examples of an “export promotion” techniques include (select all that apply):
A. Low cost loans
B. Undervalued exchange rates
C. Direct export subsidies
D. Protection of infant industries focused on exports
A. The Japanese economy was flush with money and there were some questionable investment decisions, particularly in real estate
B. Close relationships between business, government, and bankers led to ill-advised bank loans and economic decisions, preventing the normal growth and contraction of markets
Why did the Japanese economy falter in the 1980s (select all that apply):
A. The Japanese economy was flush with money and there were some questionable investment decisions, particularly in real estate
B. Close relationships between business, government, and bankers led to ill-advised bank loans and economic decisions, preventing the normal growth and contraction of markets
C. The U.S.-Japanese Free Trade Agreement was ended, closing off Japan’s access to U.S. consumers
D. Japan’s strongly overvalued yen undermined its imports
A. Japan
Which country was at the head of East Asia’s “flying geese”?
A. Japan
B. Singapore
C. South Korea
D. China
D. South Korea
With which country did the U.S. sign a free trade agreement in 2007 (coming to force in 2012), adding transparency and openness to their relationship?
A. China
B. Thailand
C. Japan
D. South Korea