Deck 5: States and Markets

Question 1

China and Vietnam are examples of formerly planned economies that:

A) adopted the shock-therapy approach to liberalization.
B) began their reform programs by privatizing large state-owned industrial enterprises.
C) suffered severe economic contraction during the transition to a market system.
D) managed the transition to a market economy in gradual steps.

Answer 1

D

Question 2

After World War II,many leaders of former British colonies,who had been educated at British universities,espoused:

A) strong monarchical views.
B) Keynesian economic doctrines.
C) Fabian socialist views.
D) Peronist economic and leadership values.

Answer 2

C

Question 3

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Big push,backward linkages

Answer 3

Answer will vary

Question 4

In the 1960s,which economist developed the theory of the "two-model gap," proposing that there was not just a savings gap but also a foreign exchange gap and that the latter was the major constraint on development?

A) John Maynard Keynes
B) Milton Friedman
C) Vinay Bhargava
D) Hollis Chenery

Question 5

Although aid to post-World War II nations was successful in helping them rebuild,similar aid to less-developed nations failed to produce the same results because:

A) miscalculations of aid were based on per capita income in each nation.
B) critical institutions within these governments were missing.
C) countries refused to play by "the rules of the game."
D) of the problem of asymmetric information.

Question 6

The Harrod-Domar model placed investment and capital at the center of:

A) exploitation of the masses.
B) economic growth.
C) enhancing a nation's status among the community of nations.
D) the tariff and quota debate.

Question 7

The essence of a big bang approach to economic reform is:

A) letting economic conditions get so bad that reforms are welcomed as a relief.
B) imposing high tax rates to finance government expenditures.
C) instituting the full range of structural and stabilization reforms over a short period of time.
D) restoring growth through heavy military spending.

Question 8

It is argued that the Marshall plan succeeded in rebuilding war-torn nations after World War II due to:

A) the people's knowledge and understanding of the role of government and government-created institutions.
B) the directives laid out within the plan by Marshall and Truman.
C) a desire to pursue corporatism an a new economic model.
D) the influence of the Protestant work-ethic, as described by Max Weber.

Question 9

East Asia's "four tigers" (Korea,Singapore,Hong Kong,and Taiwan)all achieved rapid industrial growth by:

A) eliminating virtually all government interventions.
B) heavily subsidizing exports, while prohibiting competing imports.
C) imposing effective central planning.
D) fostering a development strategy based on export of manufactures.

Question 10

One of the criticisms of the growth policies of the 1960s was that too much attention was paid to the growth rate of GDP and not enough attention was paid to:

A) the foreign exchange rate.
B) monetary and fiscal policies.
C) how the benefits of growth were distributed.
D) General Agreement on Tariffs and Trade (GATT).

Question 11

Structural adjustment programs are designed to:

A) promote the growth of industry rather than agriculture.
B) assure that scarce foreign exchange is rationed in accordance with a five-year plan.
C) dismantle controls that interfere with market allocation and efficiency.
D) stop inflation.

Question 12

During the 1950s,all of the following countries were inspired by the Soviet model of development EXCEPT for:

A) China.
B) India.
C) Ghana.
D) Burma.

Question 13

Raul Prebisch,based at the Economic Commission for Latin America and Hans Singer,based at the United Nations Industrial Development Organization,both provided the intellectual rationale for:

A) import substituting industrialization.
B) the rapid development of the service sector industry.
C) free trade.
D) liberation theology.

Question 14

After David Ricardo and Karl Marx,economists shifted to trying to understand how markets worked,and economic growth was:

A) taken for granted.
B) taken to a higher level of research.
C) suppressed as an area of research, as a reaction to the writings of Marx and Engels.
D) assumed to have already been achieved by all nations in the world of that day.

Question 15

Since the end of World War II,the debate in economic development has been organized around:

A) suppressing worldwide communist revolution.
B) a revival of the insights offered by John Stuart Mill.
C) the proper role of government in development.
D) creating a multipolar world.

Question 16

Which of the following is NOT one of the five elements needed to support a well-functioning market system?

A) holding the exchange rate fixed
B) achieving a relatively stable macroeconomic environment
C) allowing relative prices to reflect relative scarcities
D) establishing competition

Question 17

Compared to the situation in a competitive market,in a monopolistic market,firms generally:

A) use more efficient technologies.
B) sell a greater share of output in parallel markets.
C) produce less, while charging higher prices.
D) are more likely to succeed in response to infant industry protection.

Question 18

The Soviet Union was attractive to developing countries because:

A) it was very effective at producing and supplying consumer goods.
B) it had transformed a backward economy into an industrial powerhouse that defeated the strongest military in the world-Nazi Germany.
C) Lenin's Capitalism, the Highest Stage of Imperialism was a best-seller in their nations.
D) the people were fascinated with the idea of becoming technocrats.

Question 19

The international organization responsible for helping developing countries design and finance structural adjustment programs with the aim of becoming more market-based is the:

A) World Bank.
B) Organization of Petroleum Exporting Countries.
C) United Nations.
D) International Monetary Fund.

Question 20

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Government intervention,non-government intervention

Question 21

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.

-Washington Consensus,post-Washington Consensus

Question 22

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
West Pakistan,East Pakistan

Question 23

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Pareto optimality,aid to the poor

Question 24

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
South Korea,Taiwan

Question 25

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Dual price system,unified market-price system

Question 26

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Hard governments,soft governments

Question 27

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Structural adjustment,economic distortions

Question 28

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
Shock therapy,gradualist approach

Question 29

IDs and Paired-Concept Questions
These terms can be used individually as short-answer identification questions, or they can be used in pairs. In the latter case, ask students to explain (1) the meaning and significance of each of the two terms and (2) the relationship between them.
General Agreement on Tariffs and Trade (GATT),World Trade Organization (WTO)