Debt, Globalization, And The | Test Bank + Answers Chapter 3

Chapter 3: Debt, Globalization, and the Nation-State

Test Bank

Multiple Choice

1. Which of the following best characterizes how Americans obtain needed items?

a. production on a household scale

b. participation in a market economy

c. bartering with an extensive network of kin and acquaintances

d. pooling resources so that everyone gets an equal share

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Comprehension

Answer Location: Money, Wealth, and Well-Being

Difficulty Level: Medium

2. What is an example of something available to Americans that does not usually cost money?

a. shelter

b. food

c. air

d. water

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Comprehension

Answer Location: Money, Wealth, and Well-Being

Difficulty Level: Medium

3. The United States dollar is backed by ______.

a. nothing

b. gold

c. platinum

d. commodities

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Comprehension

Answer Location: A Brief History of Money

Difficulty Level: Medium

4. Furs are an example of ______ money.

a. paper

b. exchange

c. demand

d. commodity

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Application

Answer Location: A Brief History of Money

Difficulty Level: Medium

5. Contemporary use of ______ came from an agreement between the English Crown and London merchants.

a. debt money

b. democratic principles

c. industrial agriculture

d. barter exchange

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Knowledge

Answer Location: A Brief History of Money

Difficulty Level: Easy

6. Under the concept of fractional reserve banking, a bank that keeps $10 million in its possession can have up to ______ lent out.

a. $1 million

b. $10 million

c. $100 million

d. $1 billion

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Application

Answer Location: A Brief History of Money

Difficulty Level: Medium

7. The United States borrows money by ______.

a. applying for a loan through the IMF and World Bank

b. reaching out to wealthy countries for loans

c. authorizing the U.S. Treasury to issue bonds

d. collecting taxes from its citizens

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Knowledge

Answer Location: A Brief History of Money

Difficulty Level: Easy

8. What does the Federal Reserve do when money must be created?

a. It buys bonds using money that did not exist before

b. It turns raw ore into new coinage and issues the coinage

c. It authorizes the mining of new gold to back more currency

d. It initiates a war to seize wealth from other countries

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Comprehension

Answer Location: A Brief History of Money

Difficulty Level: Medium

9. Which of the following happens when inflation occurs?

a. People in debt suffer because they owe more money

b. Debt collectors profit because they collect more money

c. Commodities accumulate more quickly than money is issued

d. Money is worth less than before

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Application

Answer Location: The Society of Perpetual Growth

Difficulty Level: Medium

10. In a perfectly commoditized world, which of the following would occur?

a. A parent could rely on family members for free childcare

b. Everything would be reasonably priced

c. People would purchase fresh air

d. Only tangible items would be bought and sold

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Application

Answer Location: Capital Conversion

Difficulty Level: Medium

11. One example of an economically positive event is ______.

a. loaning a friend a sweater

b. babysitting a niece as a favor

c. losing a job

d. replacing a broken laptop

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Application

Answer Location: Capital Conversion

Difficulty Level: Medium

12. In small-scale societies, how do people get items they need?

a. The steal them from others

b. They make everything themselves

c. Other members share with them

d. They purchase them with debt

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Comprehension

Answer Location: Capital Conversion

Difficulty Level: Medium

13. Which type of capital involves the ability to make one’s own decisions?

a. Social capital

b. Natural capital

c. Political capital

d. Network capital

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Knowledge

Answer Location: Capital Conversion

Difficulty Level: Easy

14. As a country grows wealthier, its ability to maintain economic growth ______.

a. declines

b. accelerates

c. holds steady

d. varies based on external factors

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Knowledge

Answer Location: Capital Conversion

Difficulty Level: Easy

15. Polanyi referred to the ______ as “The Great Transformation.”

a. end of slavery in Europe

b. Industrial Revolution

c. rise of agriculture

d. end of feudalism

Learning Objective: Question 3.3: What kind of economic system is necessary to sustain growth?

Cognitive Domain: Knowledge

Answer Location: “The Great Transformation”

Difficulty Level: Easy

16. Adam Smith’s view of the market ignored which of the following?

a. The potential for social and environmental damage

b. Humanity’s tendency to work for the good of all

c. The advantages of wealth production

d. The disadvantages of regulating the market

Learning Objective: Question 3.3: What kind of economic system is necessary to sustain growth?

Cognitive Domain: Application

Answer Location: “The Great Transformation”

Difficulty Level: Medium

17. Neoliberals advocate for which of the following?

a. A Keynesian understanding of the market

b. Minimal state involvement in trade

c. Increased regulations to safeguard human rights

d. Communal sharing of resources

Learning Objective: Question 3.3: What kind of economic system is necessary to sustain growth?

Cognitive Domain: Comprehension

Answer Location: The Emergence of Neoliberalism

Difficulty Level: Medium

18. Which of the following provides the best example of the impact the nation-state can have on production?

a. Government subsidies of Texas cotton farms

b. Dutch tulip bulbs gifted annually to Canada

c. Citizen demand for environmental laws

d. Purchasing a locally-grown vegetable

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Application

Answer Location: T-Shirt Travels

Difficulty Level: Medium

19. Which of the following practices is most consistent with the idea of free trade?

a. Tariffs to protect domestic production

b. Environmental laws limiting damage to the ecosystem

c. Subsidies paid to farmers

d. Rescinding laws protecting dolphins

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Application

Answer Location: Free Trade

Difficulty Level: Medium

20. What is the purpose of the World Trade Organization?

a. Promoting development in countries around the world

b. Reducing poverty in Third World countries

c. Removing barriers to trade

d. mMaintaining global peace and security

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Knowledge

Answer Location: Free Trade

Difficulty Level: Easy

21. The neoliberal view toward environmental protection laws would be that ______.

a. they are crucial to protect valuable natural resources

b. they are barriers to free trade

c. companies should take responsibility for the waste they produce

d. environmental costs should not be externalized

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Application

Answer Location: Free Trade

Difficulty Level: Medium

22. Environmental and human rights protection laws can pass despite opposition from corporate interests because ______.

a. governments do not prioritize corporate interests

b. citizens of democratic countries can demand them

c. corporate leaders recognize that profit is not worth environmental and human damage

d. multinational groups override corrupt governmental leadership

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Comprehension

Answer Location: Avoiding Democratic Decision Making

Difficulty Level: Medium

23. The nation-state can be defined by its right to ______.

a. influence policy

b. use soft power

c. work for the good of the people

d. kill

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Knowledge

Answer Location: The Use of Force

Difficulty Level: Easy

24. What did the Zapatistas protest?

a. North American Free Trade Agreement (NAFTA)

b. International Monetary Fund (IMF)

c. World Bank

d. World Trade Organization (WTO)

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Knowledge

Answer Location: The Use of Force

Difficulty Level: Easy

25. Wall Street companies make money from ______.

a. gold-backed currency

b. economic collapse

c. bonds

d. interest and dividends

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: Question 3.5: Why Do Economies Collapse?

Difficulty Level: Easy

26. The first economic collapse involved the ______ trade.

a. bond

b. arms

c. drug

d. tulip

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: Tulip Bulbs and Bubbles

Difficulty Level: Easy

27. The 2007 economic crisis was related to the ______ industry.

a. peonies

b. housing

c. technology

d. clean water

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Comprehension

Answer Location: Tulip Bulbs and Bubbles

Difficulty Level: Medium

28. How do banks usually get around the reserve requirement?

a. They offload debt to other banks.

b. They pretend to hold the required reserve.

c. They claim exemption based on charitable works.

d. They don’t.

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: The Housing Bubble of 2007

Difficulty Level: Easy

29. A ‘subprime loan’ refers to a loan that ______.

a. has a very low interest rate

b. is made to unqualified borrowers

c. has low risk

d. does not need to be repaid

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: The Housing Bubble of 2007

Difficulty Level: Easy

30. What financial innovation led to the 2007 economic crisis?

a. Selling debt to other banks

b. Selling collateralized debt obligations to investors and insuring the loans

c. Offering home mortgages to borrowers with good credit and substantial savings

d. Selling tulip futures

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Application

Answer Location: The Housing Bubble of 2007

Difficulty Level: Medium

31. Why is it unlikely that regulations will require banks to take measures to prevent another economic crisis?

a. Governments profit when the economy collapses

b. Banks would refuse to follow regulations

c. It is too difficult to determine what measures would help

d. Those regulations would hinder economic growth

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Application

Answer Location: Institutional Factors Contributing to the Collapse

Difficulty Level: Medium

32. Economic growth is necessary in the current capitalist system because ______.

a. countries that produce the most wealth have the best quality of life

b. currency is backed by gold and must retain inherent value

c. money comes from debt and must generate itself plus interest

d. people are never satisfied with what they have

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Application

Answer Location: Institutional Factors Contributing to the Collapse

Difficulty Level: Medium

33. What can anthropologists contribute to discussions of public policy?

a. Anthropologists do not contribute anything of value to policy discussions.

b. Anthropologists can identify the impact of market externalities that are often ignored otherwise.

c. Anthropologists advocate for a free market and neoliberal ideals.

d. Anthropologists point out ways for banks and businesses to impact policy more effectively.

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Comprehension

Answer Location: Case Study in Doing Anthropology #3: Anthropology and Public Policy

Difficulty Level: Medium

34. What is one market externality of industrial pig farming?

a. Waterway pollution from pig waste runoff

b. The metal buildings in which the pigs live

c. The cost of feed

d. The pigs themselves

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Application

Answer Location: The Market Externalities of “Hog Hotels”

Difficulty Level: Medium

35. Both Christianity and Islam consider lending money for interest to be ______.

a. a worthwhile way to make money

b. forbidden

c. frowned upon but okay if the lenders follow rules

d. a common part of life

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: Question 3.5: Why Do Economies Collapse?

Difficulty Level: Easy

True/False

1. Economies must grow at a rate of 3% per year to stay healthy.

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Knowledge

Answer Location: The Society of Perpetual Growth

Difficulty Level: Easy

2. All societies have economies based on money.

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Knowledge

Answer Location: Capital Conversion

Difficulty Level: Easy

3. One externalized cost of the automobile is increased air pollution.

Learning Objective: Question 3.3: What kind of economic system is necessary to sustain growth?

Cognitive Domain: Comprehension

Answer Location: Market Externalization

Difficulty Level: Medium

4. The United States subsidizes the cotton industry today.

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Knowledge

Answer Location: T-Shirt Travels

Difficulty Level: Easy

5. Economic crises are rare.

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Knowledge

Answer Location: Question 3.5: Why Do Economies Collapse?

Difficulty Level: Easy

Short Answer

1. Analyze the relationship between economic growth and the existence of money in the United States.

Learning Objective: Question 3.1: How Is money created and why must modern economies perpetually grow?

Cognitive Domain: Analysis

Answer Location: A Brief History of Money

Difficulty Level: Hard

2. Discuss at least two examples of economically positive and two examples of economically negative events in your life and how they reflect the level of capital conversion in your area.

Learning Objective: Question 3.2: Where does the wealth needed to sustain growth come from?

Cognitive Domain: Analysis

Answer Location: Capital Conversion

Difficulty Level: Hard

3. Compare and contrast the views of Adam Smith and Karl Polanyi on the market.

Learning Objective: Question 3.3: What kind of economic system is necessary to sustain growth?

Cognitive Domain: Analysis

Answer Location: “The Great Transformation”

Difficulty Level: Hard

4. Discuss the advantages and disadvantages of free trade.

Learning Objective: Question 3.4: What is the role of the nation-state in sustaining growth?

Cognitive Domain: Analysis

Answer Location: Free Trade

Difficulty Level: Hard

5. How did the economic collapse of 2007 mirror the collapse of the Dutch tulip market?

Learning Objective: Question 3.5: Why do economies collapse?

Cognitive Domain: Analysis

Answer Location: Tulip Bulbs and Bubbles

Difficulty Level: Hard