Question 1

The competition between nations to cut corporate taxes so as to attract MNEs has been called

Accepted Answer

A)  the gravity model approach to trade 
B)  the simultaneity problem 
C)  strategic trade policy 
D)  comparative advantage in the terms of trade 
E)  the race to the bottom 
A)  the gravity model approach to trade 
B)  the simultaneity problem 
C)  strategic trade policy 
D)  comparative advantage in the terms of trade 
E)  the race to the bottom E

Question 2

The IMF has been criticized for each of the following except

Accepted Answer

A)  forcing repayment on short term loans 
B)  encouraging structural reforms that adversely affect the poor 
C)  favoring the interests of lenders over those of borrowers 
D)  interfering in the economies of sovereign nations 
E) excluding nations from membership for political reasons 
A)  forcing repayment on short term loans 
B)  encouraging structural reforms that adversely affect the poor 
C)  favoring the interests of lenders over those of borrowers 
D)  interfering in the economies of sovereign nations 
E) excluding nations from membership for political reasons E

Question 3

In theory,we would expect immigration to result in

Accepted Answer

A)  Lower wages and lower GDP 
B)  Lower wages and higher GDP 
C)  Higher wages and lower GDP 
D)  Higher wages and higher GDP 
E)  No impact on wages of GDP 
A)  Lower wages and lower GDP 
B)  Lower wages and higher GDP 
C)  Higher wages and lower GDP 
D)  Higher wages and higher GDP 
E)  No impact on wages of GDP B

Question 4

Which of the following is not among the primary operations of the IMF?

Accepted Answer

A)  monitoring governments to determine which are in danger of experiencing a balance of payments crisis 
B)  establishing conditions on a country's economic policies as prerequisites for loans 
C)  lending funds on a short-term basis to countries in crisis 
D)  providing technical assistance to governments, to help implement economic reforms 
E) arbitrating balance-of-payments disputes among member nations 
A)  monitoring governments to determine which are in danger of experiencing a balance of payments crisis 
B)  establishing conditions on a country's economic policies as prerequisites for loans 
C)  lending funds on a short-term basis to countries in crisis 
D)  providing technical assistance to governments, to help implement economic reforms 
E) arbitrating balance-of-payments disputes among member nations

Question 5

Which of the following is not assumed by those who believe in the race to the bottom?

Accepted Answer

A)  Corporate taxes would be at appropriate levels without subsidizing MNEs 
B)  MNEs are easily induced to relocate by government subsidies 
C)  FDI has spillover benefits that offset subsidies to MNEs 
D)  Government subsidies to MNEs will force cutbacks n the social safety net 
E)  Employment at MNEs involves reduced job security 
A)  Corporate taxes would be at appropriate levels without subsidizing MNEs 
B)  MNEs are easily induced to relocate by government subsidies 
C)  FDI has spillover benefits that offset subsidies to MNEs 
D)  Government subsidies to MNEs will force cutbacks n the social safety net 
E)  Employment at MNEs involves reduced job security

Question 6

In regressing GDP on openness,a potential solution to the simultaneity problem is to

Accepted Answer

A)  use geographical proximity to foreign markets to predict trade flows 
B)  use tariffs as an inverse measure of openness 
C)  run a limited-dependent variables regression 
D)  exclude financial reform as an independent variable 
E)  lag the dependent variable 
A)  use geographical proximity to foreign markets to predict trade flows 
B)  use tariffs as an inverse measure of openness 
C)  run a limited-dependent variables regression 
D)  exclude financial reform as an independent variable 
E)  lag the dependent variable

Question 7

The second wave of globalization is distinct from the first in all of the following respects except

Accepted Answer

A)  the second wave has been characterized by liberalization of trade policies 
B)  value is now added to a single product in several different countries before it reaches its final destination 
C)  nearly one-third of all trade is now conducted by multi-national enterprises 
D)  the opening of capital markets has occurred on a much larger scale in the second wave 
E)  the second wave has been less influenced by immigration than the first wave 
A)  the second wave has been characterized by liberalization of trade policies 
B)  value is now added to a single product in several different countries before it reaches its final destination 
C)  nearly one-third of all trade is now conducted by multi-national enterprises 
D)  the opening of capital markets has occurred on a much larger scale in the second wave 
E)  the second wave has been less influenced by immigration than the first wave

Question 8

Which of the following has not been suggested as a benefit of free trade?

Accepted Answer

A)  consumers gain from low import prices 
B)  the labor force gains from outsourcing of production 
C)  trade partners are less likely to engage in warfare 
D)  international trade promotes both short run and long run economic growth 
E)  international trade reduces poverty rates 
A)  consumers gain from low import prices 
B)  the labor force gains from outsourcing of production 
C)  trade partners are less likely to engage in warfare 
D)  international trade promotes both short run and long run economic growth 
E)  international trade reduces poverty rates

Question 9

Trade liberalization

Accepted Answer

A)  reduces poverty wherever it increases real GDP per capita 
B)  increases inequality in theory but not in practice 
C)  reduces inequality and poverty if the poor work in expanding sectors 
D)  has no effect on the distribution of income within a country 
E)  redistributes income from the rich to the poor even as overall GDP declines 
A)  reduces poverty wherever it increases real GDP per capita 
B)  increases inequality in theory but not in practice 
C)  reduces inequality and poverty if the poor work in expanding sectors 
D)  has no effect on the distribution of income within a country 
E)  redistributes income from the rich to the poor even as overall GDP declines

Question 10

Foreign Direct Investment (FDI) is defined as

Accepted Answer

A)  Significant investment by a foreign entity 
B)  Direct purchases of stocks and/or bonds by foreigners 
C)  Any investment undertaken by a multinational Enterprise (MN
E)  
D)  Government to Government Loans 
E)  A Foreign firm taking a controlling interest in local firm 
A)  Significant investment by a foreign entity 
B)  Direct purchases of stocks and/or bonds by foreigners 
C)  Any investment undertaken by a multinational Enterprise (MN
E)  
D)  Government to Government Loans 
E)  A Foreign firm taking a controlling interest in local firm

Question 11

In general Globalization has resulted in

Accepted Answer

A)  Increased global inequality 
B)  Increased inequality in poorer nations 
C)  Increased inequality in richer nations 
D)  Decreased inequality in richer nations 
E)  No impact on inequality 
A)  Increased global inequality 
B)  Increased inequality in poorer nations 
C)  Increased inequality in richer nations 
D)  Decreased inequality in richer nations 
E)  No impact on inequality

Question 12

Regressing GDP per capita on a measure of openness to trade across countries may give biased estimation results because

Accepted Answer

A)  each country measures openness differently 
B)  without further restrictions, the regression coefficient for openness could be negative 
C)  openness may capture the effects of omitted variables such as financial reform 
D)  openness is an index measure, but GDP per capita is measured in monetary units 
E)  regression is an appropriate econometric methodology only for time series, not for cross-sectional data 
A)  each country measures openness differently 
B)  without further restrictions, the regression coefficient for openness could be negative 
C)  openness may capture the effects of omitted variables such as financial reform 
D)  openness is an index measure, but GDP per capita is measured in monetary units 
E)  regression is an appropriate econometric methodology only for time series, not for cross-sectional data

Question 13

Which of the following has not been proposed as a rationale for promoting import substitution?

Accepted Answer

A)  The Prebisch-Singer hypothesis 
B)  The belief that technological progress occurs mainly in manufacturing 
C)  The infant industry argument 
D)  The idea that imports can be a source of TFP growth 
E)  The fear that reliance on imports makes the economy vulnerable to external forces 
A)  The Prebisch-Singer hypothesis 
B)  The belief that technological progress occurs mainly in manufacturing 
C)  The infant industry argument 
D)  The idea that imports can be a source of TFP growth 
E)  The fear that reliance on imports makes the economy vulnerable to external forces

Question 14

Which of the following is not alleged to be a problem associated with globalization?

Accepted Answer

A)  environmental degradation 
B)  inefficient production 
C)  loss of national sovereignty 
D)  loss of job security 
E)  inequitable income redistribution 
A)  environmental degradation 
B)  inefficient production 
C)  loss of national sovereignty 
D)  loss of job security 
E)  inequitable income redistribution

Question 15

Which is not generally true of Foreign Direct Investment by Multinational Enterprises?

Accepted Answer

A)  It tends to increase overall investment in the recipient country 
B)  They tend to pay higher wages than local firms 
C)  It tends to result in a transfer of technology to the recipient country 
D)  It tends to be more volatile than other foreign financing 
E)  They tend to undertake more research and development than local firms 
A)  It tends to increase overall investment in the recipient country 
B)  They tend to pay higher wages than local firms 
C)  It tends to result in a transfer of technology to the recipient country 
D)  It tends to be more volatile than other foreign financing 
E)  They tend to undertake more research and development than local firms

Question 16

In a global environment,governments may need to perform all of the following except

Accepted Answer

A)  restrict industrial pollution 
B)  enforce antitrust laws to curb monopoly power 
C)  redirect the allocation of resources to their most effective uses 
D)  establish social safety nets to offset insecurity 
E)  adopt international standards for protecting labor and the environment 
A)  restrict industrial pollution 
B)  enforce antitrust laws to curb monopoly power 
C)  redirect the allocation of resources to their most effective uses 
D)  establish social safety nets to offset insecurity 
E)  adopt international standards for protecting labor and the environment

Question 17

Over the past century,the pace of world trade has been

Accepted Answer

A)  steadily declining 
B)  steadily increasing 
C)  relatively constant 
D)  procyclical-rising during booms and declining during recession 
E)  counter-cyclical: rising during recessions and declining during expansions 
A)  steadily declining 
B)  steadily increasing 
C)  relatively constant 
D)  procyclical-rising during booms and declining during recession 
E)  counter-cyclical: rising during recessions and declining during expansions

Question 18

Which of the following is not an observed response of Multinational Enterprises (MNEs) to higher corporation tax in one country

Accepted Answer

A)  Lowering wages in that location 
B)  Internal restructuring to shift profits to lower tax locations 
C)  Altering investment plans so as to expand into new, lower tax, locations 
D)  Altering investment plans so as to scale back in the higher tax location 
E)  Altering investment plans so as to expand in existing plants that are in a lower tax location 
A)  Lowering wages in that location 
B)  Internal restructuring to shift profits to lower tax locations 
C)  Altering investment plans so as to expand into new, lower tax, locations 
D)  Altering investment plans so as to scale back in the higher tax location 
E)  Altering investment plans so as to expand in existing plants that are in a lower tax location

Question 19

Which of the following provides short term loans of foreign currency to governments?

Accepted Answer

A)  IMF 
B)  WTO 
C)  World Bank 
D)  GATT 
E)  Grameen Bank 
A)  IMF 
B)  WTO 
C)  World Bank 
D)  GATT 
E)  Grameen Bank

Question 20

Generally speaking,net migration into OECD countries has

Accepted Answer

A)  Fallen over the last twenty years due to increased emigration by OECD nationals 
B)  Fallen over the last twenty years due to decreased immigration by non-OECD nationals 
C)  Risen over the last twenty years due to decrease emigration by OECD nationals 
D)  Risen over the last twenty years due to increased immigration by non-OECD nationals 
E)  Stayed roughly unchanged over the last twenty years 
A)  Fallen over the last twenty years due to increased emigration by OECD nationals 
B)  Fallen over the last twenty years due to decreased immigration by non-OECD nationals 
C)  Risen over the last twenty years due to decrease emigration by OECD nationals 
D)  Risen over the last twenty years due to increased immigration by non-OECD nationals 
E)  Stayed roughly unchanged over the last twenty years

Exam 9: Globalization

The competition between nations to cut corporate taxes so as to attract MNEs has been called

The IMF has been criticized for each of the following except

In theory,we would expect immigration to result in

Which of the following is not among the primary operations of the IMF?

Which of the following is not assumed by those who believe in the race to the bottom?

In regressing GDP on openness,a potential solution to the simultaneity problem is to

The second wave of globalization is distinct from the first in all of the following respects except

Which of the following has not been suggested as a benefit of free trade?

Trade liberalization

Foreign Direct Investment (FDI) is defined as

In general Globalization has resulted in

Regressing GDP per capita on a measure of openness to trade across countries may give biased estimation results because

Which of the following has not been proposed as a rationale for promoting import substitution?

Which of the following is not alleged to be a problem associated with globalization?

Which is not generally true of Foreign Direct Investment by Multinational Enterprises?

In a global environment,governments may need to perform all of the following except

Over the past century,the pace of world trade has been

Which of the following is not an observed response of Multinational Enterprises (MNEs) to higher corporation tax in one country

Which of the following provides short term loans of foreign currency to governments?

Generally speaking,net migration into OECD countries has

What Is Macroeconomics

The Language of Macroeconomicsthe National Income Accounts

The Wealth of Nationsthe Supply Side

Capital Accumulation and Economic Growth

Total Factor Productivity, human Capital, and Technology

Endogenous Growth and Convergence

Unemployment and the Labor Market

International Trade

Consumption Investment

Business Cycles

Money and Prices

Monetary Policy

Fiscal Policy and the Role of Government

Stabilization Policy

Financial Markets: Equities and Bonds

The Banking Sector

Sovereign Debt and Default

Exchange Rate Determination I the Real Exchange Rate

Exchange Rate Determination Iinominal Exchange Rates and Asset Markets

Currency Crises and Exchange Rate Systems

Filters