Chapter 4: Instituting the Globalization Project

Test Bank

Multiple Choice

1. Neoliberalism underpinned the globalization project by ______.

a. allowing the global minority with purchasing power to capture resources in the “free market”

b. dividing countries based on their belief system

c. providing farmers in the Third World with more education

d. creating government plans that interfered with poverty intervention

Cognitive Domain: Knowledge

Answer Location: Instituting the Globalization Project

Difficulty Level: Easy

2. Which of these regions adopted export-oriented industrialization models?

a. Latin America

b. Asia

c. Africa

d. Eastern Europe

Cognitive Domain: Comprehension

Answer Location: Structural Adjustment Programs and Austerity

Difficulty Level: Medium

3. For First World firms, export-oriented industrialization became a means of ______

a. exporting raw materials into Third World

b. relocating manufacturing of goods and machinery into the Third World

c. consolidating their influence over global industrialization

d. ensuring progress of the development project

Cognitive Domain: Knowledge

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Easy

4. For Third World nations, export-oriented industrialization resulted in ______.

a. access to cheap labor

b. more control over the fate of Third World countries

c. access to foreign exchange for purchase of First World technologies

d. arrival of the global consumer

Cognitive Domain: Analysis

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

5. World factories are different from traditional track of exporting processed resources because ______.

a. goods are manufactured and produced for the world

b. their products have no “made in” tag

c. their products contain parts from every part of the world

d. production steps are located in geographically dispersed assembly lines

Cognitive Domain: Analysis

Answer Location: Liberalization, Privatization and the Reformulation of Development

Difficulty Level: Medium

6. The global production system arose because of ______.

a. the growth of export manufacturing and labor-intensive activities in the East Asian region

b. the lack of tax incentives in East Asia

c. increasing interest in globalized goods

d. decreasing balance of payments

Cognitive Domain: Knowledge

Answer Location: Liberalization, Privatization and the Reformulation of Development

Difficulty Level: Easy

7. The purpose of the Border Industrialization Program (BIP) was to ______.

a. extend US borders for industrialization purposes

b. allow foreign-owned companies to establish labor-intensive assembly plants on Mexican border

c. allow exchange of industrial parts along the Mexican border

d. extend tax concessions to Mexican industrialists

Cognitive Domain: Comprehension

Answer Location: The World Trade Organization

Difficulty Level: Medium

8. Information technology is integral to the operation of the world factory in all these ways EXCEPT for ______.

a. allowing coordination of production activities

b. circulating production blueprints among subsidiaries

c. facilitating social media activities within industries

d. globalizing production of goods and services

Cognitive Domain: Analysis

Answer Location: The Globalization Project

Difficulty Level: Medium

9. The original purpose of creating export processing zones was to ______.

a. help Third World business owners

b. manufacture products in low-wage zones

c. give five-year tax-break for companies

d. promote trade with developing nations

Cognitive Domain: Knowledge

Answer Location: General Agreement on Trade in Services (GATS)

Difficulty Level: Easy

10. In free trade zones, competing labels (brands) are ______.

a. segregated and produced by each multinational

b. produced side-by-side in the same factory

c. processed by the same workers and machines

d. processed in different factories

Cognitive Domain: Knowledge

Answer Location: The Making of a Free Trade Regime

Difficulty Level: Easy

11. Which of the following is NOT true about free trade zones?

a. tax-free economy

b. no import taxes

c. lack of export taxes

d. non-unionized labor

Cognitive Domain: Knowledge

Answer Location: The Making of a Free Trade Regime

Difficulty Level: Easy

12. As a result of preconditions set by the World Bank and/or IMF, in what way(s) must governments of developing nations act?

a. Spend less and reduce consumption.

b. Spend more and reduce consumption.

c. Spend less and increase consumption.

d. Spend more and increase consumption.

Cognitive Domain: Comprehension

Answer Location: Debt Management

Difficulty Level: Medium

13. According to the IMF and the World bank, the main objective of the Structural Adjustment Programs is to ______.

a. reduce developing nations spending on health care and education

b. ensure debt repayment and economic restructuring

c. create poverty

d. promote the presence of multinational corporations in these countries

Cognitive Domain: Comprehension

Answer Location: Debt Management

Difficulty Level: Medium

14. Which of the following is NOT an effect of structural adjustment programs?

a. Lower standard of living for poor nations

b. Increased exporting of raw materials

c. Increased value of labor

d. Decreased consumption in poor countries

Cognitive Domain: Analysis

Answer Location: Structural Adjustment Programs and Austerity

Difficulty Level: Medium

15. What has the IMF “prescribed” for the last two decades as “medicine” to third world issues?

a. monetary austerity, privatization, financial fiscal austerity

b. free trade, fiscal austerity, monetary austerity, EPZs

c. privatization, structural adjustment policies, EPZs, decrease commodity prices

d. structural adjustment policies, including trade and financial liberalization

Cognitive Domain: Knowledge

Answer Location: Structural Adjustment Programs and Austerity

Difficulty Level: Easy

16. All of the following are examples of new agricultural countries, except ______.

a. Cuba

b. Brazil

c. Mexico

d. Argentina

Cognitive Domain: Analysis

Answer Location: The Making of a Free Trade Regime

Difficulty Level: Medium

17. ______ are officials of the international financial institutions of the IMF and the World Bank, G7 political elites, executives of TNCs, and global bankers.

a. Licensed financial institution experts

b. World finance specialists

c. Global managers

d. Certified public accountants

Cognitive Domain: Knowledge

Answer Location: Global Governance

Difficulty Level: Easy

18. The debt crises in the Third World are traced to one of these developments. Which is it?

a. 1970 US presidential election

b. collapse of the Soviet Union

c. repatriation of profits from TNBs

d. spikes in oil prices engineered by OPEC

Cognitive Domain: Comprehension

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

Multiple Response

1. SELECT ALL THAT APPLY. Examples of high-value industries include:

a. processed foods industries

b. clothing industries

c. auto industries

d. steel industries

Cognitive Domain: Knowledge

Answer Location: Liberalization, Privatization and the Reformulation of Development

Difficulty Level: Easy

2. SELECT ALL THAT APPLY. Relocation of manufacturing to Third World countries is driven by many factors, including ______.

a. stringent environmental regulations in First World

b. tax concessions from Third World countries

c. cheap labor in Third World countries

d. voting decisions of First World countries

Cognitive Domain: Comprehension

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal

Difficulty Level: Medium

3. SELECT ALL THAT APPLY. Privatization of public financing accomplished which radical changes?

a. providing additional equity to the middle class

b. reduced public capacity in developmental planning

c. expanded financial protections for poor in Third World countries

d. Extended the reach of foreign ownership of assets in the global South

Cognitive Domain: Knowledge

Answer Location: Organizing Neoliberal Development

Difficulty Level: Medium

4. SELECT ALL THAT APPLY. How were Third World Countries’ debt traps also a double bind?

a. To pay off debt, they had to decrease imports and increase exports

b. Reducing imports of technology jeopardized growth

c. More debt would decrease interest rates

d. Expanding exports was difficult because commodity prices were low

Cognitive Domain: Comprehension

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

True/False

1. Divisions in the Third World enabled global political and economic elites to argue that a country’s debt stress stemmed from failure to copy the newly industrializing countries’ (NICs’) strategy of export diversification in the world market.

Cognitive Domain: Knowledge

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Easy

2. Geopolitical reasons such as the presence of militarized zones are responsible for the success of Asian NICs.

Cognitive Domain: Comprehension

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

3. The Washington Consensus is a set of neoliberal economic policies (trade and financial

liberalization, privatization, and macro-stability of the world economy) uniting multilateral institutions, representatives of the U.S. state, and associated G-7 countries that enable corporate globalization.

Cognitive Domain: Knowledge

Answer Location: The Globalization Project

Difficulty Level: Easy

4. New agricultural countries are concentrated in Third World

Cognitive Domain: Knowledge

Answer Location: The Making of a Free Trade Regime

Difficulty Level: Easy

5. The debt crises in the Third World resulted from default on loans from the First World.

Cognitive Domain: Analysis

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

6. Middle-income nations like Brazil, Thailand, and Turkey, did not shift loan repayment costs onto the working poor austerity cuts in social services.

Cognitive Domain: Knowledge

Answer Location: Debt Management

Difficulty Level: Medium

7. In the mid-1980s, the price of cornmeal, a staple in Zambia, rose 120 percent because of the IMF/World Bank adjustment policies in Africa, causing urban demonstrations and riots.

Cognitive Domain: Knowledge

Answer Location: Structural Adjustment Programs and Austerity

Difficulty Level: Easy

8. In the 1990s, economist Jeffrey Sachs observed a “trusteeship” of nearly 75 developing country governments who seldom moved without consulting the IMF staff.

Cognitive Domain: Knowledge

Answer Location: Organizing Neoliberal Development

Difficulty Level: Medium

Short Answer

1. Explain how privatization of state enterprises began and has impacted Third World countries.

Cognitive Domain: Comprehension

Answer Location: Organizing Neoliberal Development

Difficulty Level: Hard

2. Explain two ways the General Agreement on Trade in Services (GATS) threatens the social contract between state and citizen with a private contract between corporation and consumer.

Cognitive Domain: Comprehension

Answer Location: General Agreement on Trade in Services (GATS)

Difficulty Level: Hard

3. Briefly discuss the origin of debt crises in the Third World.

Cognitive Domain: Analysis

Answer Location: The Debt Crisis and Structural Adjustment Programs: Organizing Neoliberal Development

Difficulty Level: Medium

4. What are the functions and motivations for loans to Third World countries?

Cognitive Domain: Analysis

Answer Location: Debt Management

Difficulty Level: Medium