Exam 18: Globalization

The World Bank tracked the performance of countries that had undergone varying degrees of globalization since the 1960s. Which of the following was a conclusion of the study?

Because of the large amounts of resources devoted to understanding the nature of financial crises, researchers now feel comfortable making forecasts and do not expect to have any more surprises in the future.

Globalization does not reward countries that follow good economic policies with greater access to the savings of the rest of the world to help finance growth and development.

Which of the following statements accurately expresses evidence that globalization does not encourage a "race to the bottom" in labor standards?

Which of the following is entrusted with the responsibility of settling trade disputes between countries?

Investors may be caught by surprise when devaluation occurs, particularly if the government does not disclose its international reserve position in a timely and informative manner.

_____ is the argument that with globalization, countries compete for international investment by offering low or no environmental regulations or labor standards.

Any movement to reduce the globalization of the world's economies will make workers in the poorest countries worse off than they would otherwise be.

Which of the following countries went through a financial crisis in 1997?

International trade constantly increased throughout the twentieth century.

Which of the following stands true for income inequality?

The figure given below shows the demand curves for dollars arising out of Thai demand for U.S. goods and services and the supply of dollars arising out of the U.S. demand for Thai goods, services, and financial assets. D1 and S1 are the original demand and supply curves. Figure 18.2 -Refer to Figure 18.2. Suppose investors predict that the value of Thai assets will decrease in the near future. This affects the current equilibrium exchange rate. To restore the original equilibrium, the Thai government intervenes in the foreign exchange market. How will this government action appear on the graph?

Supporter of globalization argue that multinational firms pay higher wages than local firms and provide greater benefits for workers than existed in the country prior to globalization.

In the financial crises of the 1990s, investors lost huge amounts of wealth as a consequence of the rapid drop in values of local firms in each country.

Supporters of globalization argue that increased globalization will lead to:

What is a speculative attack on a currency?

In the last two decades, income inequality has increased in China.

Evidence exists that countries with the most open economies tend to have more stringent environmental regulations.

As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean investments would provide lower returns than expected. What was the impact of such a realization on the foreign exchange market?

The figure given below shows the demand curves for dollars arising out of Thai demand for U.S. goods and services and the supply of dollars arising out of the U.S. demand for Thai goods, services, and financial assets. D1 and S1 are the original demand and supply curves. Figure 18.1 -Refer to Figure 18.1. Assume that there is a market perception that the value of Thai assets will decrease in the near future. This affects the current equilibrium exchange rate. What can the Thai central bank do to restore the previous value of the baht?