Question 1

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 2

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 3

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 4

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

Accepted Answer

A) 'Free rider problem' 
B) 'Tragedy of the commons' 
C) 'Race to the bottom' 
D) 'Flag of convenience' 
E) 'Enlightened self-interest' 
A) 'Free rider problem' 
B) 'Tragedy of the commons' 
C) 'Race to the bottom' 
D) 'Flag of convenience' 
E) 'Enlightened self-interest'

Question 5

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.

Accepted Answer

A) True 
 B)False

Question 6

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 7

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 8

Globalization benefits all the participating nations equally.

Accepted Answer

A) True 
 B)False

Question 9

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 Malaysia owed substantial 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 Malaysia owed substantial 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 10

An increase in the supply of U.S.dollar in the foreign exchange market would cause the dollar to appreciate with respect to other currencies.

Accepted Answer

A) True 
 B)False

Question 11

What is a speculative attack on a currency?

Accepted Answer

A) National governments decide to engage in competitive devaluations against a given country. 
B) International organizations such as the WTO and the IMF attempt to reorder the currency's system. 
C) Private investors sell domestic currency and buy foreign currency, betting that the domestic currency will soon be devaluated. 
D) Casinos in Las Vegas allow the proliferation of bets for and against a given currency. 
E) A country is at war, and the enemy country "freezes" all the accounts denominated in the local currency. 
A) National governments decide to engage in competitive devaluations against a given country. 
B) International organizations such as the WTO and the IMF attempt to reorder the currency's system. 
C) Private investors sell domestic currency and buy foreign currency, betting that the domestic currency will soon be devaluated. 
D) Casinos in Las Vegas allow the proliferation of bets for and against a given currency. 
E) A country is at war, and the enemy country "freezes" all the accounts denominated in the local currency.

Question 12

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 13

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

Accepted Answer

A) True 
 B)False

Question 14

An overall decline in communication and transportation costs have facilitated global interactions in the twentieth and the twenty first century.

Accepted Answer

A) True 
 B)False

Question 15

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 16

Which of the following is not a defining characteristic of globalization?

Accepted Answer

A) Increased cross-border flow of trade in goods 
B) Increased cross-border flow of trade in services 
C) Increased international mobility of information 
D) Increased frequency of wars 
E) Increased mobility of individuals across borders 
A) Increased cross-border flow of trade in goods 
B) Increased cross-border flow of trade in services 
C) Increased international mobility of information 
D) Increased frequency of wars 
E) Increased mobility of individuals across borders

Question 17

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 18

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 19

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 20

What happened to the so-called Asian tigers in the 1960s and 1970s?

Accepted Answer

A) They underwent a period in which their economies turned into mild communism. 
B) The literacy rates of these countries declined in this time period (that is, a smaller percentage of the people could read). 
C) They all became part of the First World. 
D) They became the most technologically advanced countries in the world. 
E) They underwent the process of opening their economies and experienced rapid economic growth. 
A) They underwent a period in which their economies turned into mild communism. 
B) The literacy rates of these countries declined in this time period (that is, a smaller percentage of the people could read). 
C) They all became part of the First World. 
D) They became the most technologically advanced countries in the world. 
E) They underwent the process of opening their economies and experienced rapid economic growth.

Exam 32: Globalization

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

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

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

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.

Which of the following stands true for income inequality?

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.

Globalization benefits all the participating nations equally.

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

An increase in the supply of U.S.dollar in the foreign exchange market would cause the dollar to appreciate with respect to other currencies.

What is a speculative attack on a currency?

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

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

An overall decline in communication and transportation costs have facilitated global interactions in the twentieth and the twenty first century.

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

Which of the following is not a defining characteristic of globalization?

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

Globalization can be defined as:

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

What happened to the so-called Asian tigers in the 1960s and 1970s?

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

Elasticity: Demand and Supply

National Income Accounting

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

Consumer Choice

Supply: The Costs of Doing Business

Unemployment and Inflation

Macroeconomic Equilibrium: Aggregate Demand and Supply

Profit Maximization

Aggregate Expenditures

Perfect Competition

Income and Expenditures Equilibrium

Monopoly

Fiscal Policy

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Money and Banking

Market Failures, Government Failures, and Rent Seeking

Monetary Policy

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

Resource Markets

Macroeconomic Viewpoints: New Keynesian, Monetarist, and New Classical

The Labor Market

Capital Markets

Economic Growth

Development Economics

the Land Market and Natural Resources

Aging, Social Security and Health Care

Elasticity: Demand and Supply

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

Consumer Choice

International Trade Restrictions

World Trade Equilibrium

Exchange Rates and Financial Links Between Countries

International Trade Restrictions

Supply: the Costs of Doing Business

Exchange Rates and Financial Links Between Countries

Profit Maximization

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Antitrust and Regulation

Market Failures, Government Failures, and Rent Seeking

Resource Markets

The Labor Market

Capital Markets

The Land Market and Natural Resources

Aging, Social Security and Health Care

Income Distribution, Poverty and Government Policy

World Trade Equilibrium

International Trade Restrictions

Exchange Rates and Financial Links Between Countries

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