Question 1

According to Keynes,economies can get stuck at high levels of unemployment because of

Accepted Answer

A)  government budget deficits. 
B)  uncertainty of investment decisions. 
C)  adverse parliamentary regulations. 
D)  exchange rate instability. 
E)  cash hoarding. 
A)  government budget deficits. 
B)  uncertainty of investment decisions. 
C)  adverse parliamentary regulations. 
D)  exchange rate instability. 
E)  cash hoarding. B

Question 2

Of the ten recessions that have occurred in the United States between 1946 and 2002,

Accepted Answer

A)  4 of 10 have happened under Republican administrations. 
B)  5 of 10 have happened under Republican administrations. 
C)  6 of 10 have happened under Republican administrations. 
D)  7 of 10 have happened under Republican administrations. 
E)  8 of 10 have happened under Republican administrations. 
A)  4 of 10 have happened under Republican administrations. 
B)  5 of 10 have happened under Republican administrations. 
C)  6 of 10 have happened under Republican administrations. 
D)  7 of 10 have happened under Republican administrations. 
E)  8 of 10 have happened under Republican administrations. E

Question 3

What was Keynes' explanation for high levels of unemployment in the 1920s & 1930s? How did this challenge neoclassical theory at that time?

Accepted Answer

Keynes' explanation for high levels of unemployment in the 1920s and 1930s was based on his theory of aggregate demand. He argued that during times of economic downturn, there is a lack of aggregate demand for goods and services, leading to high levels of unemployment. This was due to a decrease in consumer spending, investment, and government expenditure, which in turn led to a decrease in production and employment.

This explanation challenged neoclassical theory at the time, which emphasized the role of flexible wages and prices in ensuring full employment. Neoclassical economists believed that if wages and prices were allowed to adjust freely, the economy would naturally reach full employment. However, Keynes argued that this was not the case, as wages and prices were not always flexible enough to adjust quickly in response to changes in demand. He also pointed out that during times of economic downturn, businesses may become pessimistic about future demand, leading them to cut back on production and employment regardless of wage levels.

Keynes' explanation for high unemployment challenged the prevailing neoclassical theory by highlighting the importance of aggregate demand in determining employment levels, and by emphasizing the limitations of wage and price flexibility in achieving full employment. This laid the groundwork for his influential work in macroeconomics and the development of Keynesian economics.

Question 4

The chief weakness of the partisan model is that

Accepted Answer

A)  it is not a good predictor of leftist governments but it is of rightist governments. 
B)  it is not a good predictor of rightist governments but it is of leftist governments. 
C)  partisan macroeconomic policies are differentiated too sharply. 
D)  it is not a good predictor of U.S. governments but it is of European governments. 
E)  it is not a good predictor of European governments but it is of U.S. governments. 
A)  it is not a good predictor of leftist governments but it is of rightist governments. 
B)  it is not a good predictor of rightist governments but it is of leftist governments. 
C)  partisan macroeconomic policies are differentiated too sharply. 
D)  it is not a good predictor of U.S. governments but it is of European governments. 
E)  it is not a good predictor of European governments but it is of U.S. governments.

Question 5

Governmental attitudes toward economic management after WW I changed because

Accepted Answer

A)  electoral systems were more restrictive concerning minimum voting age after the war. 
B)  electoral systems were more restrictive concerning minimum income or property conditions after the war. 
C)  universal male suffrage had been adopted in all Western European countries by 1911. 
D)  universal female suffrage had been adopted in all Western European countries by 1931. 
E)  Interests of workers had been but excluded from the political process until after the war. 
A)  electoral systems were more restrictive concerning minimum voting age after the war. 
B)  electoral systems were more restrictive concerning minimum income or property conditions after the war. 
C)  universal male suffrage had been adopted in all Western European countries by 1911. 
D)  universal female suffrage had been adopted in all Western European countries by 1931. 
E)  Interests of workers had been but excluded from the political process until after the war.

Question 6

Between 1995 and 2001 when the dollar rose in value against America' largest trading partners,American exporters found it increasingly easier to sell in foreign markets.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following isnot a part of aggregate demand? Consumption and investment expenditures made by

Accepted Answer

A)  government. 
B)  domestic customers. 
C)  foreign consumers. 
D)  domestic producers. 
E)  foreign producers. 
A)  government. 
B)  domestic customers. 
C)  foreign consumers. 
D)  domestic producers. 
E)  foreign producers.

Question 8

Explain the concept of the "Unholy Trinity" as the trade-off between domestic economic autonomy and exchange-rate stability.

Accepted Answer

The concept of the "Unholy Trinity" refe

Question 9

The "Unholy Trinity" framework deals with three government policy goals:

Accepted Answer

A)  floating exchange rate, domestic autonomy of monetary policy, and capital mobility. 
B)  fixed exchange rate, domestic autonomy of monetary policy, and labor mobility. 
C)  fixed exchange rate, domestic autonomy of monetary policy, and capital mobility. 
D)  fixed exchange rate, domestic autonomy of fiscal policy, and capital mobility. 
E)  floating exchange rate, domestic autonomy of fiscal policy, and labor mobility. 
A)  floating exchange rate, domestic autonomy of monetary policy, and capital mobility. 
B)  fixed exchange rate, domestic autonomy of monetary policy, and labor mobility. 
C)  fixed exchange rate, domestic autonomy of monetary policy, and capital mobility. 
D)  fixed exchange rate, domestic autonomy of fiscal policy, and capital mobility. 
E)  floating exchange rate, domestic autonomy of fiscal policy, and labor mobility.

Question 10

To maintain a fixed exchange rate,a government does not have to surrender its ability to manage the domestic economy.

Accepted Answer

A) True 
 B)False

Question 11

Explain and discuss how electoral reform and the Keynesian revolution had a profound effect on exchange rate policies.

Accepted Answer

Electoral reform and the Keynesian revol

Question 12

What was Keynes' recommendation for government intervention in fiscal and monetary policies at this time? Were they successful?

Accepted Answer

John Maynard Keynes recommended that the

Question 13

Describe and explain the partisan model of monetary and exchange-rate politics.

Accepted Answer

The partisan model of monetary and excha

Question 14

Keynes' revolutionary theories and policy recommendations focused primarily on the problem of

Accepted Answer

A)  employment. 
B)  inflation. 
C)  consumer prices. 
D)  exports. 
E)  fixed exchange rate systems. 
A)  employment. 
B)  inflation. 
C)  consumer prices. 
D)  exports. 
E)  fixed exchange rate systems.

Question 15

Describe and explain the electoral model of monetary and exchange-rate politics.

Accepted Answer

The electoral model of monetary and exch

Question 16

Briefly explain the similarities and differences between the three society-based models of monetary and exchange-rate politics.

Accepted Answer

The three society-based models of moneta

Question 17

Which of the following statements about the level of the exchange is correct according to the sectoral model?

Accepted Answer

A)  The export-oriented sector prefers a strong currency. 
B)  The import-competing sector prefers a strong currency. 
C)  The traded-goods sector prefers a strong currency. 
D)  The nontraded goods sector prefers a weak currency. 
E)  Financial services sector tend to be agnostic with respect to the level of exchange rates. 
A)  The export-oriented sector prefers a strong currency. 
B)  The import-competing sector prefers a strong currency. 
C)  The traded-goods sector prefers a strong currency. 
D)  The nontraded goods sector prefers a weak currency. 
E)  Financial services sector tend to be agnostic with respect to the level of exchange rates.

Question 18

What are the weaknesses of each of the three society-based models of monetary and exchange-rate politics?

Accepted Answer

The weaknesses of each of the three soci

Question 19

The nontraded-goods and the import-competing sectors are not greatly affected by exchange-rate movements,and they attach little value to exchange-rate stability.

Accepted Answer

A) True 
 B)False

Question 20

Keynes argued that governments must accept persistent high employment until wages fell low enough for the demand for labor to increase.

Accepted Answer

A) True 
 B)False

According to Keynes,economies can get stuck at high levels of unemployment because of

Of the ten recessions that have occurred in the United States between 1946 and 2002,

What was Keynes' explanation for high levels of unemployment in the 1920s & 1930s? How did this challenge neoclassical theory at that time?

The chief weakness of the partisan model is that

Governmental attitudes toward economic management after WW I changed because

Between 1995 and 2001 when the dollar rose in value against America' largest trading partners,American exporters found it increasingly easier to sell in foreign markets.

Which of the following isnot a part of aggregate demand? Consumption and investment expenditures made by

Explain the concept of the "Unholy Trinity" as the trade-off between domestic economic autonomy and exchange-rate stability.

The "Unholy Trinity" framework deals with three government policy goals:

To maintain a fixed exchange rate,a government does not have to surrender its ability to manage the domestic economy.

Explain and discuss how electoral reform and the Keynesian revolution had a profound effect on exchange rate policies.

What was Keynes' recommendation for government intervention in fiscal and monetary policies at this time? Were they successful?

Describe and explain the partisan model of monetary and exchange-rate politics.

Keynes' revolutionary theories and policy recommendations focused primarily on the problem of

Describe and explain the electoral model of monetary and exchange-rate politics.

Briefly explain the similarities and differences between the three society-based models of monetary and exchange-rate politics.

Which of the following statements about the level of the exchange is correct according to the sectoral model?

What are the weaknesses of each of the three society-based models of monetary and exchange-rate politics?

The nontraded-goods and the import-competing sectors are not greatly affected by exchange-rate movements,and they attach little value to exchange-rate stability.

Keynes argued that governments must accept persistent high employment until wages fell low enough for the demand for labor to increase.

International Political Economy

The World Trade Organization and the World Trade System

The Political Economy of International Trade Cooperation

A Society-Centered Approach to Trade Politics

A State-Centered Approach to Trade Politics

Trade and Development I: Import Substitution Industrialization

Trade and Development II: Economic Reform

Multinational Corporations in the Global Economy

The Politics of Multinational Corporations

The International Monetary System

Cooperation, conflict and Crisis in the Contemporary International Monetary System

A State-Centered Approach to Monetary and Exchange-Rate Policies

Developing Countries and International Finance I: the Latin American Debt Crisis

Developing Countries and International Finance II: a Decade of Crises

Globalization: Consequences and Controversies

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Exam 12: A Society-Centered Approach to Monetary and Exchange-Rate Policies

According to Keynes,economies can get stuck at high levels of unemployment because of

Of the ten recessions that have occurred in the United States between 1946 and 2002,

What was Keynes' explanation for high levels of unemployment in the 1920s & 1930s? How did this challenge neoclassical theory at that time?

The chief weakness of the partisan model is that

Governmental attitudes toward economic management after WW I changed because

Between 1995 and 2001 when the dollar rose in value against America' largest trading partners,American exporters found it increasingly easier to sell in foreign markets.

Which of the following isnot a part of aggregate demand? Consumption and investment expenditures made by

Explain the concept of the "Unholy Trinity" as the trade-off between domestic economic autonomy and exchange-rate stability.

The "Unholy Trinity" framework deals with three government policy goals:

To maintain a fixed exchange rate,a government does not have to surrender its ability to manage the domestic economy.

Explain and discuss how electoral reform and the Keynesian revolution had a profound effect on exchange rate policies.

What was Keynes' recommendation for government intervention in fiscal and monetary policies at this time? Were they successful?

Describe and explain the partisan model of monetary and exchange-rate politics.

Keynes' revolutionary theories and policy recommendations focused primarily on the problem of

Describe and explain the electoral model of monetary and exchange-rate politics.

Briefly explain the similarities and differences between the three society-based models of monetary and exchange-rate politics.

Which of the following statements about the level of the exchange is correct according to the sectoral model?

What are the weaknesses of each of the three society-based models of monetary and exchange-rate politics?

The nontraded-goods and the import-competing sectors are not greatly affected by exchange-rate movements,and they attach little value to exchange-rate stability.

Keynes argued that governments must accept persistent high employment until wages fell low enough for the demand for labor to increase.

International Political Economy

The World Trade Organization and the World Trade System

The Political Economy of International Trade Cooperation

A Society-Centered Approach to Trade Politics

A State-Centered Approach to Trade Politics

Trade and Development I: Import Substitution Industrialization

Trade and Development II: Economic Reform

Multinational Corporations in the Global Economy

The Politics of Multinational Corporations

The International Monetary System

Cooperation, conflict and Crisis in the Contemporary International Monetary System

A State-Centered Approach to Monetary and Exchange-Rate Policies

Developing Countries and International Finance I: the Latin American Debt Crisis

Developing Countries and International Finance II: a Decade of Crises

Globalization: Consequences and Controversies

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