Deck 13: International Political Economy

Question 1

Which of the following is an example of direct foreign direct investment?

A) The purchase of bonds by foreigners.
B) The employment of local workers by foreign firms.
C) The construction of a factory by a foreign corporation.
D) Investment in the local stock market.

Answer 1

C

Question 2

Which of the following was not one of the original three pillars of the Bretton-Woods system?

A) The World Bank.
B) The International Trade Organization.
C) The International Monetary Fund.
D) The General Agreement on Tariffs and Trade.

Answer 2

B

Question 3

What was the most important banking family in Florence during the Renaissance?

A) Leccacorvos.
B) Medicis.
C) Peruzzis.
D) Lombards.

Answer 3

B

Question 4

What was the Hanseatic League?

A) A medieval trading group that united commercial cities along the Baltic Sea.
B) An alliance among the Italian city-states to repel a French invasion of Italy.
C) A British guild that represented cloth manufacturers.
D) A transnational religious order of knights located on the island of Rhodes.

Question 5

What was the first international monetary system called?

A) The gold standard.
B) The barter system.
C) The silver standard.
D) The international monetary fund.

Question 6

What is the theory of political economy that believes that the purpose of trade is to strengthen the state?

A) Marxism.
B) Liberalism.
C) Monetarism.
D) Mercantilism.

Question 7

Which of the following is a feature of mercantilism?

A) Free trade.
B) Tariffs.
C) Absence of government intervention in the economy.
D) Improvement of the lives of ordinary citizens.

Question 8

Which of the following theorists influenced Immanuel Wallerstein?

A) Adam Smith.
B) Karl Marx.
C) Jeremy Bentham.
D) Alexander Hamilton.

Question 9

Which of the following did America's first Secretary of the Treasury Alexander Hamilton advocate?

A) Liberalism.
B) Marxism.
C) Constructivism.
D) Mercantilism.

Question 10

Which of the following coined the term "mercantile system"?

A) Adam Smith.
B) Karl Marx.
C) Jeremy Bentham.
D) Alexander Hamilton.

Question 11

Which of the following is an example of indirect foreign investment?

A) The purchase of bonds.
B) The purchase of a factory.
C) The purchase of a bank.
D) The construction of a building.

Question 12

Who was the English privateer who pillaged Spanish treasure?

A) Sir Walter Raleigh.
B) Sir John Hawkins.
C) Sir Francis Drake.
D) Captain Christopher Newport.

Question 13

Which of the following was a member of the medieval Hanseatic League?

A) Trieste.
B) Berlin.
C) Florence.
D) Hamburg.

Question 14

What are industries called that have recently been established and are thought to have the potential to achieve comparative advantage if protected by the state?

A) Competitive industry.
B) Infant industry.
C) State-owned industry.
D) Transnational industry.

Question 15

What is a tax placed on imports called?

A) A tariff.
B) A nontariff barrier.
C) A certificate of deposit.
D) A subsidy.

Question 16

What type of interest group is most likely to be opposed to outsourcing?

A) Manufacturers associations.
B) Banks.
C) Labor unions.
D) Free trade advocates.

Question 17

What economic philosophy was reflected in Frederic Bastiat's satirical pamphlet "The Petition"?

A) Mercantilism.
B) Liberalism.
C) Marxism.
D) Neo-Marxism.

Question 18

What was Adam Smith's idea that competition among numerous self-interested individuals and enterprises benefit society called?

A) Comparative advantage.
B) Invisible hand.
C) Economies of scale.
D) Opportunity costs.

Question 19

Which of the following was a leading liberal economist?

A) David Ricardo.
B) Friedrich Engels.
C) Friedrich List.
D) Alexander Hamilton.

Question 20

What was the basic insight of the theory of comparative advantage?

A) Efficiency can be achieved by minimizing opportunity costs.
B) Efficiency can be achieved by what a country could less expensively produce than its trading partners.
C) Efficiency is the result of self-sufficiency in all economic inputs.
D) Efficiency results from maximizing the number of a country's trading partners.

Question 21

What is the theory of political economy that believes that the purpose of trade is to reduce the cost and increase the range of products available to consumers?

A) Marxism.
B) Liberalism.
C) Monetarism.
D) Mercantilism.

Question 22

What do Marxists call the process by which history evolves?

A) Proletarian solidarity.
B) Dialectical materialism.
C) Capitalist overproduction.
D) Historical socialism.

Question 23

What norm underlies Marxism?

A) Comparative advantage.
B) Political power.
C) Efficiency.
D) Equality.

Question 24

Who coined the term "capitalism"?

A) Richard Cobden.
B) David Ricardo.
C) Karl Marx.
D) Adam Smith.

Question 25

Which of the following is an example of a "beggar-thy-neighbor" policy?

A) A unilateral currency depreciation.
B) Floating interest rates.
C) Fixed interest rates.
D) Cancellation of Third World debts.

Question 26

What is the solution to a "liquidity crisis"

A) Cut deficit spending.
B) Raise interest rates.
C) Decrease the amount of money in circulation.
D) Increase the amount of money in circulation.

Question 27

Which countries were worst hit by the Great Depression?

A) The US and France.
B) Germany and France.
C) The US and Great Britain.
D) Germany and Great Britain.

Question 28

With whom is the New Deal most closely associated?

A) Harry S. Truman.
B) Herbert Hoover.
C) Franklin D. Roosevelt.
D) Dwight D. Eisenhower.

Question 29

What is the "most-favored-nation" norm?

A) The requirement that countries treat each other equally in trade relations.
B) The provision of lower tariffs to countries in the developing world.
C) The rule that allows neighboring countries to provide each other with especially low tariffs.
D) The rule governing trade within the European Union.

Question 30

Which theory differentiates among "core," "periphery," and "semi-periphery"?

A) State Capitalist Theory.
B) The World Trade Organization.
C) World Systems Theory.
D) Dependencia Theory.

Question 31

What happens when the value of the dollar declines?

A) The cost of US exports overseas declines.
B) The cost of US imports from overseas declines.
C) It becomes easier for foreign countries to export goods to the US.
D) It becomes harder for the US to export goods overseas.

Question 32

When currency exchange rates float, what determines the value of a currency?

A) The price of gold.
B) Supply and demand.
C) The price at which the government pegs the currency.
D) The basket of goods each unit of the currency will buy.

Question 33

Which of the following was a reason that the United States abandoned fixed exchange rates?

A) The US was losing the Vietnam War.
B) The Nixon administration wanted a "strong" dollar.
C) American exports were becoming relatively uncompetitive overseas.
D) America's NATO allies requested it.

Question 34

Which of the following is not a "hard" currency?

A) The Mexican peso.
B) The Japanese yen.
C) The European euro.
D) The US dollar.

Question 35

Which of the following is not a condition that the IMF usually sets when it loans money to a country?

A) Increased spending on social programs.
B) Budget austerity.
C) Privatization of public enterprises.
D) High interest rates.

Question 36

What was the Uruguay Round's most important accomplishment?

A) An agreement about intellectual property.
B) The addition of Russia to the G-7.
C) The elimination of agricultural tariffs.
D) The establishment of the WTO.

Question 37

What does Section 301 of the 1974 US Trade Act deal with?

A) Export controls.
B) Dumping of goods at below cost.
C) Agricultural subsidies.
D) Environmental regulations.

Question 38

Which of the following WTO cases illustrates the difficulty in distinguishing between efforts to maintain health and safety standards and policies designed to protect domestic industry?

A) The steel subsidies case.
B) The genetically modified foods case.
C) The agricultural subsidies case.
D) The enforcement of intellectual property rights.

Question 39

Who declared "We in America today are nearer to the final triumph over poverty than ever before in the history of any land"?

A) Harry S. Truman.
B) Herbert Hoover.
C) Franklin D. Roosevelt.
D) Calvin Coolidge.

Question 40

What is the major claim of hegemonic stability theory?

A) The institutions that sustain the global economy require the support of a powerful state to prevent countries from pursuing selfish economic interests.
B) Economic stability requires a rough economic equality among major states.
C) Prosperity requires free trade among the system's largest countries.
D) Deflation can only be avoided if a major state cuts its budget.

Question 41

What happened in Bhopal, India in December 1984?

A) A release of poison gas by a Union Carbide plant produced many deaths.
B) A free trade agreement was signed between the United States and India.
C) A war erupted between India and Pakistan.
D) India tested a nuclear device.

Question 42

Where would one find the Ogoni ethnic group?

A) Brazil.
B) Pakistan.
C) South Africa.
D) Nigeria.

Question 43

Which of the following was not part of the "Global Compact" signed between the UN and a number of transnational corporations.

A) Forgive Third World debts.
B) Refuse to participate or condone human rights abuses.
C) Support freedom of association and recognize the right to collective bargaining.
D) Abolish child labor.

Question 44

What was the "Asian contagion"?

A) A pulmonary disease that spread from China.
B) A financial crisis that began in Thailand.
C) A group of Indonesian terrorists.
D) The poisoning of water by toxins leeching into the soil in India.

Question 45

What country emerged from World War One as the world's chief financier?

A) The United States.
B) Great Britain.
C) Germany.
D) France.

Question 46

Which international agency is charged with regulating currency exchange rates?

A) The International Monetary Fund.
B) The World Trade Organization.
C) The GATT.
D) The World Bank.

Question 47

Which of the following presidential candidates in 2016 opposed free trade?

A) Bernie Sanders.
B) Hillary Clinton.
C) Donald Trump.
D) All of the above.