Deck 27: Global Trade and Global Finance

Question 1

In economics, 'gravity models' provide robust corroboration for the proposition that trade flows are likely to touch down with a final consumer who lives closer to, rather than further away from, the place of production.

Answer 1

True

Question 2

Populist nationalists object to tax havens because they believe tax havens undermine the integrity of global governance structures.

Answer 2

False

Question 3

The average daily turnover on world currency markets is approximately $5 trillion.

Answer 3

True

Question 4

Under the Bretton Woods system, US dollars were freely available at a fixed rate relative to the price of gold, which had the effect of fixing all exchange rates with respect to each other. In a series of steps between 1971 and 1973, the Nixon administration first backed the United States away from these currency responsibilities, and then reneged on them altogether.

Question 5

IMF and World Bank conditionalities are so named because they ensure that countries qualify for financial assistance not only on the grounds of their need, but also on the condition that they follow the policy objectives laid down by these institutions.

Question 6

What was established in 1995 as a replacement for the General Agreement on Tariffs and Trade?

A) WTO
B) ITO
C) OECD
D) UNCTAD

Question 7

When treated as a purely economic phenomenon, the most frequently cited indicator of ____ is the eye-catching increase in world trade since the 1970s.

A) globalization
B) foreign direct investment
C) liberalization
D) neoliberalism

Question 8

What organization did John Maynard Keynes propose?

A) The Bank for International Settlements (BIS)
B) The International Trade Organization (ITO)
C) The Multilateral Agreement on Investment
D) The World Trade Organization (WTO)

Question 9

The GATT…

A) Was created to facilitate the continual expansion of global trade.
B) Institutionalized the most favoured nation principle.
C) Providing a negotiating context in which any country could extend tariff concessions agreed bilaterally to third countries.
D) All of the answers given are correct.

Question 10

International trade and international finance differ because…

A) World trade has increased substantially since the 1970s, while global financial flows have not.
B) Global financial flows have increased substantially since the 1970s, while world trade has not.
C) International trade occurs when one country's citizens produce a good that another country's citizens consume, while (with the exception of foreign direct investment) it is very difficult to think of examples from the financial sphere in which one country 'produces' money for another country to 'consume'.
D) None of the answers given are correct.

Question 11

The IMF and World Bank evoke dissent from civil society for all of the following reasons except…

A) They have typically been the most visible formal symbols of the institutionalized power of global finance.
B) Since the global financial crisis, the IMF has consistently failed to criticize governments it believes have prioritized the austerity solution to imbalances in public finances for purely ideological reasons.
C) They ensure that developing and developed countries alike respect the new reality, in which a systematic transfer of power has occurred, whereby individuals working in private financial institutions have usurped the power traditionally ascribed to governments under systems of representative democracy.
D) Nobody elected the representatives of global finance to make political decisions on behalf of all governments in the world.

Question 12

How many members did the WTO have as of late 2018?

A) 53
B) 105
C) 164
D) 185

Question 13

The Single Undertaking refers to…

A) The package of reforms that members vote on at each WTO ministerial meeting.
B) The standardization of the IMF's approach to loan requests.
C) The World Bank's ideological commitment to development, largely through neoliberal means.
D) None of the options given are correct.

Question 14

Who are the members of the original Quad that historically held the most prominent position in the pre-agreement process at the WTO?

A) The US, the EU, Brazil, and China.
B) The US, the EU, Japan, and Germany.
C) The US, the EU, Japan, and Canada.
D) The US, the EU, India, and China.

Question 15

Evidence suggests that the Chinese yuan is…

A) Not receiving state support from the Chinese government.
B) Operating under pure exchange rate floating.
C) Undervalued.
D) Overvalued.