Question 1

In much of the Third World, where labor is plentiful, labor and industries that rely on abundant labor

Accepted Answer

A)   support free trade.
B)   oppose free trade.
C)   do not have an opinion regarding free trade.
D)   support free trade with limited protectionist measures. A

Question 2

What percentage of American university students studied abroad during 2009-2010?

Accepted Answer

A)   35 percent
B)   20 percent
C)   10 percent
D)   1 percent D

Question 3

What is the main difference for members of the World Trade Organization (WTO) who also are members of a free trade area (FTA)?

Accepted Answer

A)   WTO members are provided lower tariffs than members of the FTA.
B)   There are no nontariff barriers for WTO members, but there may be some for FTA members.
C)   Within a free trade area, there are no tariffs at all, but there are some tariffs for WTO members.
D)   Barriers may be low for FTA members, but they are even lower for WTO members. C

Question 4

About how many foreign students study in the United States annually?

Accepted Answer

A)   100,000 foreign students
B)   400,000 foreign students
C)   700,000 foreign students
D)   1,000,000 foreign students

Question 5

How did the General Agreement on Tariffs and Trade (GATT) function and in what way was it successful? Why was it replaced by the World Trade Organization?

Accepted Answer

The answer of How did the General Agreement on Tariffs...

Question 6

One of the main criticisms of globalization is that it

Accepted Answer

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

Question 7

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

Accepted Answer

A)   most favored nation principle.
B)   nondiscrimination.
C)   cost of adjustment.
D)   internationalization of finance.

Question 8

The primary change from the General Agreement on Tariffs and Trade (GATT) to the World Trade Organization (WTO) focused on the ability of the WTO to

Accepted Answer

A)   penalize the United States for any trade violation.
B)   prohibit certain countries from seeking penalties against other countries.
C)   allow states to challenge each other's laws at the WTO.
D)   create an international trade police that was permitted to examine imported goods.

Question 9

In the past, governments had greater control over currency prices because

Accepted Answer

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

Question 10

Voluntary export restraints (VERs) are

Accepted Answer

A)   limits on the number of an item that can be imported.
B)   regulations adopted when one country threatens restrictions on trade and an exporting country agrees to limit exports to avoid the imposition of more stringent limits.
C)   restrictions that items to be sold as a domestic product must have a certain percentage of its final product components assembled domestically.
D)   None of the above is true.

Question 11

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

Accepted Answer

A)   nondiscrimination.
B)   mutual agreement.
C)   coercive negotiation.
D)   collective action.

Question 12

States traditionally seek to achieve three goals concerning international monetary policy. Which of the following is not one of those goals?

Accepted Answer

A)   Predictability of exchange rates
B)   Free flow of capital
C)   Regulation of monetary policy through international organizations
D)   Autonomous domestic monetary policy

Question 13

What factors undermined the gold standard immediately following World War I?

Accepted Answer

A)   Significant number of countries had to print more currency in order to finance the war effort.
B)   President Wilson took the United States off the gold standard because of unsustainable deficits.
C)   The war severely weakened Britain's financial position.
D)   Both options A and C are true.

Question 14

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. Why did states remove 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)   Liberalization is the belief that markets are better than governments at allocating economic resources.
D)   All of the above are true.

Question 15

All of the following are considered to be nontariff barriers except

Accepted Answer

A)   voluntary export restraints.
B)   health and environmental regulations.
C)   quotas.
D)   taxes on imports.

Question 16

Discuss the origins and purposes of the Bretton Woods system, particularly as it relates to trade and monetary policies. Why did the Bretton Woods monetary regime give way to a system of floating exchange rates in the 1970s and 1980s?

Accepted Answer

The answer of Discuss the origins and purposes of the...

Question 17

Since its economy began to take off in the early 1980s, China has lifted approximately how many people out of poverty, largely through participation in the global economy?

Accepted Answer

A)   60 million
B)   140 million
C)   350 million
D)   600 million

Question 18

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

Accepted Answer

A)   debate.
B)   discussion.
C)   consultation.
D)   preparation.

Question 19

Which member country of the European Union apparently came very close to defaulting on its debt?

Accepted Answer

A)   United Kingdom
B)   Ireland
C)   Italy
D)   Greece

Question 20

The fundamental linkage between debt crises and monetary crises that can shift a manageable downturn into an unmanageable panic is referred to as a

Accepted Answer

A)   lender of last resort.
B)   crisis of confidence.
C)   monetary stagnation.
D)   currency devaluation.

Exam 11: The Globalization of Trade and Finance