Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is true of the crises witnessed by the southeast Asian countries in the 1990s?

Accepted Answer

A)  The crises were sparked by the conversion from a fixed exchange rate regime to a flexible exchange rate regime. 
B)  The crises occurred because among all countries, Malaysia owed the maximum short-term debt to foreigners. 
C)  The consumption of petroleum products grew at an uncontrolled rate in Indonesia. 
D)  Indonesia was the only country that owed a substantial long-term debt to the US. 
E)  The stock prices dropped by 26 percent in Korea and by 57 percent in Malaysia. 
A)  The crises were sparked by the conversion from a fixed exchange rate regime to a flexible exchange rate regime. 
B)  The crises occurred because among all countries, Malaysia owed the maximum short-term debt to foreigners. 
C)  The consumption of petroleum products grew at an uncontrolled rate in Indonesia. 
D)  Indonesia was the only country that owed a substantial long-term debt to the US. 
E)  The stock prices dropped by 26 percent in Korea and by 57 percent in Malaysia.

Question 3

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 these 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 these 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 4

The deleveraging of financial institutions led to the financial crisis of 2007-2008 sometimes also referred to as the _____.

Accepted Answer

A)  stock crisis 
B)  debt crisis 
C)  stock market bubble 
D)  bank run 
E)  credit crisis 
A)  stock crisis 
B)  debt crisis 
C)  stock market bubble 
D)  bank run 
E)  credit crisis

Question 5

Globalization is an economic issue and does not involve political and social dimensions.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following is one of the most important causes for the recent increase in income inequality in China?

Accepted Answer

A)  The introduction of free markets while imposing restrictions on internal migration 
B)  The introduction of regulations that do not allow families to have more than one child 
C)  Globalization 
D)  The increase in pollution as a result of industrialization 
E)  Tougher government controls on the banking system 
A)  The introduction of free markets while imposing restrictions on internal migration 
B)  The introduction of regulations that do not allow families to have more than one child 
C)  Globalization 
D)  The increase in pollution as a result of industrialization 
E)  Tougher government controls on the banking system

Question 7

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 8

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 9

The financial crises of the 1990s have conclusively proved that globalization causes financial crises.

Accepted Answer

A) True 
 B)False

Question 10

Identify the correct statement.

Accepted Answer

A)  Between the 1960s and the 1990s, per capita GDPs grew faster in nonglobalizing countries. 
B)  Between the 1960s and the 1990s, per capita GDPs grew faster in globalizing countries than in industrialized countries. 
C)  Between the 1960s and the 1990s, per capita GDP growth rates in the industrialized world increased. 
D)  Between the 1960s and the 1990s, per capita GDP in the industrialized world decreased. 
E)  Between the 1960s and the 1990s, per capita GDP in all developing countries increased. 
A)  Between the 1960s and the 1990s, per capita GDPs grew faster in nonglobalizing countries. 
B)  Between the 1960s and the 1990s, per capita GDPs grew faster in globalizing countries than in industrialized countries. 
C)  Between the 1960s and the 1990s, per capita GDP growth rates in the industrialized world increased. 
D)  Between the 1960s and the 1990s, per capita GDP in the industrialized world decreased. 
E)  Between the 1960s and the 1990s, per capita GDP in all developing countries increased.

Question 11

What has been one of the results of globalization experienced by Eastern European nations after the fall of their socialist regimes?

Accepted Answer

A)  All traces of their traditional culture have disappeared. 
B)  These countries have attracted foreign investment from industrialized countries, which have transferred cleaner technologies and thus, improved environmental quality. 
C)  These countries have not yet adapted to capitalism, and a majority support a new movement to return to communism. 
D)  Most national forests have been destroyed by multinational companies. 
E)  Many new diseases have been introduced because of increased contact with the West. 
A)  All traces of their traditional culture have disappeared. 
B)  These countries have attracted foreign investment from industrialized countries, which have transferred cleaner technologies and thus, improved environmental quality. 
C)  These countries have not yet adapted to capitalism, and a majority support a new movement to return to communism. 
D)  Most national forests have been destroyed by multinational companies. 
E)  Many new diseases have been introduced because of increased contact with the West.

Question 12

Which of the following increases the possibility of depreciation of the domestic currency in the foreign exchange market?

Accepted Answer

A)  An increase in the demand for domestic goods in the foreign market 
B)  A decrease in total imports made by the domestic country 
C)  A decrease in the interest rates in the domestic country 
D)  An increase in the short-term foreign investments 
E)  An increase in domestic production of import substitutes 
A)  An increase in the demand for domestic goods in the foreign market 
B)  A decrease in total imports made by the domestic country 
C)  A decrease in the interest rates in the domestic country 
D)  An increase in the short-term foreign investments 
E)  An increase in domestic production of import substitutes

Question 13

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 14

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.

Question 15

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.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following stands true for income inequality?

Accepted Answer

A)  The benefits of increased economic growth are widely shared in the First World countries. 
B)  As a result of globalization, income inequality in China has decreased. 
C)  The decrease in income inequality in China is an effect of socialist policies in that country. 
D)  The gap between rich countries and globalized developing countries has shrunk. 
E)  Internal migration has played a big role in reducing the income inequality in China. 
A)  The benefits of increased economic growth are widely shared in the First World countries. 
B)  As a result of globalization, income inequality in China has decreased. 
C)  The decrease in income inequality in China is an effect of socialist policies in that country. 
D)  The gap between rich countries and globalized developing countries has shrunk. 
E)  Internal migration has played a big role in reducing the income inequality in China.

Question 17

Countries that enjoy long distance flows of goods, capital, and services as well as information and perceptions that accompany market exchanges would be categorized under _____ globalization.

Accepted Answer

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

Question 18

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 19

Without the presence of international organizations such as the World Bank, the United Nations, and the WTO, transfers of funds from rich to poor countries would not exist in an ongoing manner.

Accepted Answer

A) True 
 B)False

Question 20

Family, language, and customs tie people to particular areas, so that the fact that people have the right to migrate does not mean that large numbers of them will actually do so.

Accepted Answer

A) True 
 B)False

Exam 18: Globalization

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

Which of the following is true of the crises witnessed by the southeast Asian countries in the 1990s?

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

The deleveraging of financial institutions led to the financial crisis of 2007-2008 sometimes also referred to as the _____.

Globalization is an economic issue and does not involve political and social dimensions.

Which of the following is one of the most important causes for the recent increase in income inequality in China?

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

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

The financial crises of the 1990s have conclusively proved that globalization causes financial crises.

Identify the correct statement.

What has been one of the results of globalization experienced by Eastern European nations after the fall of their socialist regimes?

Which of the following increases the possibility of depreciation of the domestic currency in the foreign exchange market?

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

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

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.

Which of the following stands true for income inequality?

Countries that enjoy long distance flows of goods, capital, and services as well as information and perceptions that accompany market exchanges would be categorized under _____ globalization.

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

Without the presence of international organizations such as the World Bank, the United Nations, and the WTO, transfers of funds from rich to poor countries would not exist in an ongoing manner.

Family, language, and customs tie people to particular areas, so that the fact that people have the right to migrate does not mean that large numbers of them will actually do so.

The Wealth of Nations: Ownership and Economic Freedom

Scarcity and Opportunity Costs

The Market and Price System

The Aggregate Economy

National Income Accounting

An Introduction to the Foreign Exchapterange 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

Exchapterange Rates and Financial Links Between Countries

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