Question 1

Why did the Greek crisis threaten to spread to the rest of Europe?

Accepted Answer

A) Because there were not any other states struggling with debt 
B) Because of arbitrage and capital mobility 
C) Because of the International Monetary Fund 
D) Because many banks that were owed monies by Greek businesses were headquartered in other European states 
A) Because there were not any other states struggling with debt 
B) Because of arbitrage and capital mobility 
C) Because of the International Monetary Fund 
D) Because many banks that were owed monies by Greek businesses were headquartered in other European states D

Question 2

Why were services, such as insurance, banking, and consulting, left out of the original General Agreement on Tariffs and Trade (GATT)agreement?

Accepted Answer

A) Because they are an ever-smaller part of international trade and do not matter 
B) Because they cannot be included in free trade arrangements, as each country has different standards 
C) Because leading service firms put pressure on government to reduce discrimination in services and these interests are extremely powerful politically 
D) Because there was too much disagreement and debate among the members of the organization in regard to services 
A) Because they are an ever-smaller part of international trade and do not matter 
B) Because they cannot be included in free trade arrangements, as each country has different standards 
C) Because leading service firms put pressure on government to reduce discrimination in services and these interests are extremely powerful politically 
D) Because there was too much disagreement and debate among the members of the organization in regard to services C

Question 3

One of the important challenges in pursuing a state's international monetary policy concerns the "trilemma" involving exchange rates, capital mobility, and domestic monetary policy. Explain this "trilemma" in terms of what makes it a dilemma. What can states do to try to reconcile these three objectives?

Accepted Answer

The "trilemma" in international monetary policy refers to the challenge of reconciling three conflicting objectives: exchange rate stability, capital mobility, and domestic monetary policy autonomy. This dilemma arises from the fact that it is difficult for a state to simultaneously achieve all three objectives, as pursuing one may come at the expense of the others.

For example, if a state wants to maintain a fixed exchange rate, it may need to restrict capital mobility to prevent speculative attacks on its currency. However, restricting capital mobility can limit the flow of investment and hinder economic growth. On the other hand, if a state wants to pursue an independent domestic monetary policy to control inflation or stimulate the economy, it may need to allow its exchange rate to float and accept the volatility that comes with it.

To reconcile these conflicting objectives, states can adopt various policy measures. One approach is to use capital controls to manage the flow of capital in and out of the country, allowing for some degree of domestic monetary policy autonomy while maintaining exchange rate stability. Another approach is to pursue a flexible exchange rate regime, which allows the exchange rate to adjust in response to market forces while still allowing for capital mobility and domestic monetary policy independence.

Additionally, states can also engage in international coordination and cooperation to address these challenges. This can involve working with other countries to establish common rules and standards for capital flows, exchange rate policies, and monetary policy coordination.

Overall, the "trilemma" in international monetary policy presents a complex and challenging dilemma for states, but by implementing a combination of policy measures and international cooperation, it is possible to navigate these conflicting objectives and achieve a more balanced and sustainable approach to international monetary policy.

Question 4

Which of the following components is part of what makes up globalization?

Accepted Answer

A) International investment has become dominated by a few international businesses. 
B) International trade has increased relative to domestic trade. 
C) International investment has decreased. 
D) The world is defined by many separate markets. 
A) International investment has become dominated by a few international businesses. 
B) International trade has increased relative to domestic trade. 
C) International investment has decreased. 
D) The world is defined by many separate markets.

Question 5

The current international monetary system consists of which of the following?

Accepted Answer

A) Capital mobility, domestic monetary autonomy, and floating exchange rates 
B) Capital mobility, fixed exchange rates, and restricted trade 
C) Domestic monetary autonomy, fixed exchange rates, and restricted currency flows 
D) Domestic monetary autonomy, floating exchange rates, and limited capital flows 
A) Capital mobility, domestic monetary autonomy, and floating exchange rates 
B) Capital mobility, fixed exchange rates, and restricted trade 
C) Domestic monetary autonomy, fixed exchange rates, and restricted currency flows 
D) Domestic monetary autonomy, floating exchange rates, and limited capital flows

Question 6

In economics, a recession is defined as which of the following?

Accepted Answer

A) A decline in output of less than 5 percent 
B) A decline in output of less than 10 percent 
C) A decline in output of less than 20 percent 
D) A decline in output of less than 25 percent 
A) A decline in output of less than 5 percent 
B) A decline in output of less than 10 percent 
C) A decline in output of less than 20 percent 
D) A decline in output of less than 25 percent

Question 7

Which of the following are considered tariffs?

Accepted Answer

A) Voluntary export restraints 
B) Health and environmental regulations 
C) Quotas 
D) Taxes on imports 
A) Voluntary export restraints 
B) Health and environmental regulations 
C) Quotas 
D) Taxes on imports

Question 8

Which U.S. President took the United States off the gold standard?

Accepted Answer

A) Nixon 
B) Ford 
C) Carter 
D) Eisenhower 
A) Nixon 
B) Ford 
C) Carter 
D) Eisenhower

Question 9

The General Agreement on Tariffs and Trade (GATT)replaced the earlier concept of reciprocity with which of the following?

Accepted Answer

A) Nondiscrimination 
B) Mutuality 
C) Coercive negotiation 
D) Collective action 
A) Nondiscrimination 
B) Mutuality 
C) Coercive negotiation 
D) Collective action

Question 10

Which global group does not play a significant role in trade politics?

Accepted Answer

A) Manufacturers 
B) Consumers 
C) Workers 
D) Environmentalists 
A) Manufacturers 
B) Consumers 
C) Workers 
D) Environmentalists

Question 11

What is a financial burden that is imposed on a country as a result of changes in the international economic system called?

Accepted Answer

A) The austerity adjustment 
B) The autonomous debt principle 
C) The cost of adjustment 
D) The international currency principle 
A) The austerity adjustment 
B) The autonomous debt principle 
C) The cost of adjustment 
D) The international currency principle

Question 12

What is the first step in the World Trade Organization (WTO)dispute settlement process?

Accepted Answer

A) Debate 
B) Discussion 
C) Consultation 
D) Preparation 
A) Debate 
B) Discussion 
C) Consultation 
D) Preparation

Question 13

In the 1980s and 1990s, an increasing number of states removed the restrictions on capital flows, one by one, that had been part of every state's policies since World War II. Which is not a reason that states removed these controls?

Accepted Answer

A) Actors who controlled a lot of capital put pressure on governments to allow freer movement. 
B) States removed these controls because allowing capital mobility provided access to massive amounts of international capital. 
C) The ideology of liberalization emerged. 
D) The WTO required free capital flow for membership. 
A) Actors who controlled a lot of capital put pressure on governments to allow freer movement. 
B) States removed these controls because allowing capital mobility provided access to massive amounts of international capital. 
C) The ideology of liberalization emerged. 
D) The WTO required free capital flow for membership.

Question 14

What is comparative advantage based on under globalization?

Accepted Answer

A) Military strength 
B) State control of international financial institutions 
C) State accumulation of large amounts of capital 
D) Factors such as technology, education, and network effects 
A) Military strength 
B) State control of international financial institutions 
C) State accumulation of large amounts of capital 
D) Factors such as technology, education, and network effects

Question 15

Why did governments have greater control over currency prices in the past?

Accepted Answer

A) Because governments were stronger and more centralized 
B) Because governments controlled more currency than private actors 
C) Because the cost of exchanging currency was higher in the past 
D) Because governments had a monopolistic control over currency markets 
A) Because governments were stronger and more centralized 
B) Because governments controlled more currency than private actors 
C) Because the cost of exchanging currency was higher in the past 
D) Because governments had a monopolistic control over currency markets

Question 16

What is one of the main criticisms of globalization?

Accepted Answer

A) That it makes the powerful more powerful and wealthy 
B) That it actually makes everyone less well off 
C) That it outsources jobs from developing to developed countries 
D) That it prevents poorer countries from expanding their economies 
A) That it makes the powerful more powerful and wealthy 
B) That it actually makes everyone less well off 
C) That it outsources jobs from developing to developed countries 
D) That it prevents poorer countries from expanding their economies

Question 17

Many fear that globalization has forced countries to make all kinds of concessions to corporations in order to attract investment. What is this process called?

Accepted Answer

A) Protectionism 
B) The race to the bottom 
C) The race to the top 
D) "Offshoring" 
A) Protectionism 
B) The race to the bottom 
C) The race to the top 
D) "Offshoring"

Question 18

What are the competing costs and benefits of globalization?

Accepted Answer

Globalization has both costs and benefit

Question 19

What can exacerbate a debt crisis if the debtor country borrows in dollars?

Accepted Answer

A) A loss in the value of the debtor's currency relative to the dollar 
B) A collapse of the floating exchange rate 
C) Austerity conditions imposed by the International Monetary Fund 
D) The nature of the two-level game in which domestic politics trumps repayment of loans 
A) A loss in the value of the debtor's currency relative to the dollar 
B) A collapse of the floating exchange rate 
C) Austerity conditions imposed by the International Monetary Fund 
D) The nature of the two-level game in which domestic politics trumps repayment of loans

Question 20

Should a country face a debt crisis, what is likely to happen? Give the example of one country that faced such a crisis and discuss how it was handled. What can happen if a debt crisis is not adequately addressed?

Accepted Answer

A country facing a debt crisis is likely

Why did the Greek crisis threaten to spread to the rest of Europe?

Why were services, such as insurance, banking, and consulting, left out of the original General Agreement on Tariffs and Trade (GATT)agreement?

Which of the following components is part of what makes up globalization?

The current international monetary system consists of which of the following?

In economics, a recession is defined as which of the following?

Which of the following are considered tariffs?

Which U.S. President took the United States off the gold standard?

The General Agreement on Tariffs and Trade (GATT)replaced the earlier concept of reciprocity with which of the following?

Which global group does not play a significant role in trade politics?

What is a financial burden that is imposed on a country as a result of changes in the international economic system called?

What is the first step in the World Trade Organization (WTO)dispute settlement process?

In the 1980s and 1990s, an increasing number of states removed the restrictions on capital flows, one by one, that had been part of every state's policies since World War II. Which is not a reason that states removed these controls?

What is comparative advantage based on under globalization?

Why did governments have greater control over currency prices in the past?

What is one of the main criticisms of globalization?

Many fear that globalization has forced countries to make all kinds of concessions to corporations in order to attract investment. What is this process called?

What are the competing costs and benefits of globalization?

What can exacerbate a debt crisis if the debtor country borrows in dollars?

Should a country face a debt crisis, what is likely to happen? Give the example of one country that faced such a crisis and discuss how it was handled. What can happen if a debt crisis is not adequately addressed?

Introduction: Problems and Questions in International Politics

The Historical Evolution of International Politics

Theories of International Relations: Realism and Liberalism

Theories of International Relations: Economic Structuralism, Constructivism, and Feminism

The State, Society, and Foreign Policy

Bureaucracies, Groups, and Individuals in the Foreign Policy Process

International Organizations and Transnational Actors

International Insecurity and the Causes of War and Peace

The Use of Force

Fundamentals of International Political Economy

The Problem of Global Inequality

International Law, Norms, and Human Rights

The Global Environment and International Politics

Conclusion: Power and Purpose in a Changing World

Filters

Exam 11: The Globalization of Trade and Finance

Why did the Greek crisis threaten to spread to the rest of Europe?

Why were services, such as insurance, banking, and consulting, left out of the original General Agreement on Tariffs and Trade (GATT)agreement?

Which of the following components is part of what makes up globalization?

The current international monetary system consists of which of the following?

In economics, a recession is defined as which of the following?

Which of the following are considered tariffs?

Which U.S. President took the United States off the gold standard?

The General Agreement on Tariffs and Trade (GATT)replaced the earlier concept of reciprocity with which of the following?

Which global group does not play a significant role in trade politics?

What is a financial burden that is imposed on a country as a result of changes in the international economic system called?

What is the first step in the World Trade Organization (WTO)dispute settlement process?

In the 1980s and 1990s, an increasing number of states removed the restrictions on capital flows, one by one, that had been part of every state's policies since World War II. Which is not a reason that states removed these controls?

What is comparative advantage based on under globalization?

Why did governments have greater control over currency prices in the past?

What is one of the main criticisms of globalization?

Many fear that globalization has forced countries to make all kinds of concessions to corporations in order to attract investment. What is this process called?

What are the competing costs and benefits of globalization?

What can exacerbate a debt crisis if the debtor country borrows in dollars?

Should a country face a debt crisis, what is likely to happen? Give the example of one country that faced such a crisis and discuss how it was handled. What can happen if a debt crisis is not adequately addressed?

Introduction: Problems and Questions in International Politics

The Historical Evolution of International Politics

Theories of International Relations: Realism and Liberalism

Theories of International Relations: Economic Structuralism, Constructivism, and Feminism

The State, Society, and Foreign Policy

Bureaucracies, Groups, and Individuals in the Foreign Policy Process

International Organizations and Transnational Actors

International Insecurity and the Causes of War and Peace

The Use of Force

Fundamentals of International Political Economy

The Problem of Global Inequality

International Law, Norms, and Human Rights

The Global Environment and International Politics

Conclusion: Power and Purpose in a Changing World

Filters