Question 1

Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?

Accepted Answer

A)  Investors may be able to enforce market efficiency. 
B)  The WTO will disenfranchise the country that allows this to happen. 
C)  Investors will immediately organize a speculative attack and the price of stocks will inflate. 
D)  The balance-of-payments deficit will increase leading the economy into a debt trap. 
E)  Investors may not be able to adequately judge when the risk of investing in a firm rises. 
A)  Investors may be able to enforce market efficiency. 
B)  The WTO will disenfranchise the country that allows this to happen. 
C)  Investors will immediately organize a speculative attack and the price of stocks will inflate. 
D)  The balance-of-payments deficit will increase leading the economy into a debt trap. 
E)  Investors may not be able to adequately judge when the risk of investing in a firm rises.

Question 2

Which of the following is not considered a criticism of globalization?

Accepted Answer

A)  International corporations serve only the interests of the corporations. 
B)  Globalization promotes "free" but not "fair" trade. 
C)  Globalization encourages harmful labor practices. 
D)  Globalization promotes only trade based on comparative, and not absolute advantage. 
E)  Globalization occurs at the cost of environmental quality. 
A)  International corporations serve only the interests of the corporations. 
B)  Globalization promotes "free" but not "fair" trade. 
C)  Globalization encourages harmful labor practices. 
D)  Globalization promotes only trade based on comparative, and not absolute advantage. 
E)  Globalization occurs at the cost of environmental quality.

Question 3

The phrase "race to the bottom" refers to the situation in which globalization results in countries competing for international investment by imposing low or no environmental regulations or labor standards.

Accepted Answer

A) True 
 B)False

Question 4

Larger countries tend to be more globalized, because their large internal markets allow them to export a wide range of products.

Accepted Answer

A) True 
 B)False

Question 5

Countries in which one would see a spread of ideas, information, images, and people would be categorized under _____ globalization.

Accepted Answer

A)  economic 
B)  social 
C)  ethical 
D)  cultural 
E)  political 
A)  economic 
B)  social 
C)  ethical 
D)  cultural 
E)  political

Question 6

Globalization can be defined as:

Accepted Answer

A)  the attitude or policy of placing the interests of the entire world above those of individual nations. 
B)  viewing the entire world as a proper sphere for one nation to project political influence. 
C)  a period in history that has witnessed a dramatic change in world political thought and the balance of power. 
D)  an increased cross-border flow of trade in goods, services, and financial assets, along with an increased international mobility of technology, information, and individuals. 
E)  a social movement that supports global cooperation and interaction, but which opposes the negative effects of economic development across nations. 
A)  the attitude or policy of placing the interests of the entire world above those of individual nations. 
B)  viewing the entire world as a proper sphere for one nation to project political influence. 
C)  a period in history that has witnessed a dramatic change in world political thought and the balance of power. 
D)  an increased cross-border flow of trade in goods, services, and financial assets, along with an increased international mobility of technology, information, and individuals. 
E)  a social movement that supports global cooperation and interaction, but which opposes the negative effects of economic development across nations.

Question 7

Short-term international investment helps to create a greater level of liquidity, more stable exchange rates, and therefore a decreased likelihood of financial crisis.

Accepted Answer

A) True 
 B)False

Question 8

Globalization benefits all the participating nations equally.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following arguments is not used by promoters of globalization as one of the reasons why free trade and international investment result in higher standards of living?

Accepted Answer

A)  Free trade helps developing countries. 
B)  International organizations represent governments and people, not the interests of corporations. 
C)  There is no convincing evidence that globalization occurs at the expense of the environment. 
D)  There is no convincing evidence that globalization occurs by encouraging harmful labor practices. 
E)  Globalization brings better cultural practices to countries that have obsolete cultural traditions. 
A)  Free trade helps developing countries. 
B)  International organizations represent governments and people, not the interests of corporations. 
C)  There is no convincing evidence that globalization occurs at the expense of the environment. 
D)  There is no convincing evidence that globalization occurs by encouraging harmful labor practices. 
E)  Globalization brings better cultural practices to countries that have obsolete cultural traditions.

Question 10

Which of the following is true of the crises experienced in the 1990s?

Accepted Answer

A)  Most of the economic crises occurred in Mexico. 
B)  Each of the countries affected by the crisis in Southeast Asia owed substantial long-term debt to foreigners. 
C)  During this time, bank loans were a sizable fraction of GDP in all the crisis countries except Mexico. 
D)  Stock prices dropped by an amount ranging from 21 percent in Malaysia to 35 percent in Korea. 
E)  Exchange rate against the U.S. dollar dropped substantially in the Philippines. 
A)  Most of the economic crises occurred in Mexico. 
B)  Each of the countries affected by the crisis in Southeast Asia owed substantial long-term debt to foreigners. 
C)  During this time, bank loans were a sizable fraction of GDP in all the crisis countries except Mexico. 
D)  Stock prices dropped by an amount ranging from 21 percent in Malaysia to 35 percent in Korea. 
E)  Exchange rate against the U.S. dollar dropped substantially in the Philippines.

Question 11

What has happened to countries that did not participate in the globalization of the world economy?

Accepted Answer

A)  The fraction of the population living below the poverty line in these countries has decreased. 
B)  These countries have been mired in a low-growth path and are experiencing high poverty rates. 
C)  The socialist policies in this countries have caused a big change in the income distribution, something that globalization could not have achieved. 
D)  The growth rate of these countries is stronger than the First World countries. 
E)  The domestic industries in these countries have experienced robust growth. 
A)  The fraction of the population living below the poverty line in these countries has decreased. 
B)  These countries have been mired in a low-growth path and are experiencing high poverty rates. 
C)  The socialist policies in this countries have caused a big change in the income distribution, something that globalization could not have achieved. 
D)  The growth rate of these countries is stronger than the First World countries. 
E)  The domestic industries in these countries have experienced robust growth.

Question 12

In the financial crises of the 1990s, countries lost international reserves trying to maintain the parity of their currencies.

Accepted Answer

A) True 
 B)False

Question 13

Critics of globalization argue that international trade agreements represent roadblocks to democratic decision making, because power is decentralized from large international institutions to the local communities in the process.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following international organizations do globalization critics claim is serving the interests of large multinational corporations?

Accepted Answer

A)  NATO 
B)  The World Bank 
C)  The Fed 
D)  The United Nations 
E)  The International Labor Organization 
A)  NATO 
B)  The World Bank 
C)  The Fed 
D)  The United Nations 
E)  The International Labor Organization

Question 15

The Asian tigers have experienced rapid economic growth in recent times. Hence, these countries are sometimes referred to as:

Accepted Answer

A)  first-world countries. 
B)  newly industrialized countries. 
C)  the globalization limelight. 
D)  second-world countries. 
E)  the G-8 nations. 
A)  first-world countries. 
B)  newly industrialized countries. 
C)  the globalization limelight. 
D)  second-world countries. 
E)  the G-8 nations.

Question 16

Which of the following multinational agreements allows the international movement of workers?

Accepted Answer

A)  NATO 
B)  The European Union 
C)  The group of G-8 
D)  NAFTA 
E)  The United Nations Accords 
A)  NATO 
B)  The European Union 
C)  The group of G-8 
D)  NAFTA 
E)  The United Nations Accords

Question 17

It has been proved empirically that globalization increases economic growth without increasing income inequality within nations.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a direct consequence of the development of faster and cheaper computers?

Accepted Answer

A)  The development of double-entry bookkeeping 
B)  The enhanced ability of managers of business operations to deal with complex transactions in far-flung locations 
C)  The creation of money 
D)  The decrease in workers' productivity, because more computers need fewer people to operate them 
E)  A decline in the rate of inflation 
A)  The development of double-entry bookkeeping 
B)  The enhanced ability of managers of business operations to deal with complex transactions in far-flung locations 
C)  The creation of money 
D)  The decrease in workers' productivity, because more computers need fewer people to operate them 
E)  A decline in the rate of inflation

Question 19

India is one of the countries that did not participate in the process of globalization.

Accepted Answer

A) True 
 B)False

Question 20

According to evidence from around the world, the real losers in globalization of the world economy are:

Accepted Answer

A)  non-government organizations. 
B)  environmental activists. 
C)  skilled laborers in the globalizing nations. 
D)  countries that have not participated in the globalization process. 
E)  the poorest people in the globalized developing countries. 
A)  non-government organizations. 
B)  environmental activists. 
C)  skilled laborers in the globalizing nations. 
D)  countries that have not participated in the globalization process. 
E)  the poorest people in the globalized developing countries.

Exam 18: Globalization

Which of the following is a probable consequence of the presence of accounting rules that allow firms to hide the financial impact of actions that would harm investors?

Which of the following is not considered a criticism of globalization?

The phrase "race to the bottom" refers to the situation in which globalization results in countries competing for international investment by imposing low or no environmental regulations or labor standards.

Larger countries tend to be more globalized, because their large internal markets allow them to export a wide range of products.

Countries in which one would see a spread of ideas, information, images, and people would be categorized under _____ globalization.

Globalization can be defined as:

Short-term international investment helps to create a greater level of liquidity, more stable exchange rates, and therefore a decreased likelihood of financial crisis.

Globalization benefits all the participating nations equally.

Which of the following arguments is not used by promoters of globalization as one of the reasons why free trade and international investment result in higher standards of living?

Which of the following is true of the crises experienced in the 1990s?

What has happened to countries that did not participate in the globalization of the world economy?

In the financial crises of the 1990s, countries lost international reserves trying to maintain the parity of their currencies.

Critics of globalization argue that international trade agreements represent roadblocks to democratic decision making, because power is decentralized from large international institutions to the local communities in the process.

Which of the following international organizations do globalization critics claim is serving the interests of large multinational corporations?

The Asian tigers have experienced rapid economic growth in recent times. Hence, these countries are sometimes referred to as:

Which of the following multinational agreements allows the international movement of workers?

It has been proved empirically that globalization increases economic growth without increasing income inequality within nations.

Which of the following is a direct consequence of the development of faster and cheaper computers?

India is one of the countries that did not participate in the process of globalization.

According to evidence from around the world, the real losers in globalization of the world economy are:

Economics: the World Around You

Choice, Opportunity Costs, and Specialization

Markets, Demand and Supply, and the Price System

The Market System and the Private and Public Sector

National Income Accounting

An Introduction to the Foreign Exchange Market and the Balance of Payments

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Aggregate Expenditures

Income and Expenditures Equilibrium

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy: Tradeoffs, Expectations, Credibility, and Sources of Business Cycles

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

Economic Growth

Development Economics

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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