Test Bank + Answers Ch7 International Political Economy And

CHAPTER 7: INTERNATIONAL POLITICAL ECONOMY AND DEVELOPMENT

Test Questions

Multiple-Choice Questions

Question type: factual

Section 7.1 Elements of International Political Economy

1. The United States spent about _______ in Marshall Plan aid.

1. $12 billion.
2. $1 billion.
3. $56 million.
4. $98 billion.

Question type: factual

Section 7.1 Elements of International Political Economy

2. The United States assumed the role as the major global financial power in the

1. 1930s.
2. 1970s.
3. 1920s.
4. 1940s.

Question type: factual

Section 7.1 Elements of International Political Economy

3. What is the approximate size of the GDP of the United States in U.S. dollars?

1. $6 trillion.
2. $500 billion.
3. $19 trillion.
4. $175 billion.

Question type: conceptual

Section 7.1 Elements of International Political Economy

4. International political economy (IPE) can defined as

1. The study of how politics and economics interact in an international context.
2. The sum of all GDPs in the world divided by the world population.
3. The growing independence of states from domestic market–driven factors in a globalized world.
4. The key decisions of the World Trade Organization and other key international organizations.

Question type: factual

Section 7.1 Elements of International Political Economy

5. National currencies—such as dollars, Euros, pesos, and rubles—can be converted into other currencies at what is termed

1. An exchange rate.
2. A flexible rate.
3. A variable rate.
4. A flat rate.

Question type: conceptual

Section 7.1 Elements of International Political Economy

6. The difference between the value of exports and imports is

1. The production total.
2. The added value.
3. The balance of trade.
4. The net profit margin.

Question type: conceptual

Section 7.2 Principles of Mercantilism

7. Mercantilism calls for the ________ of available resources in the name of the state.

1. Accumulation and protection.
2. Maximization and disbursement.
3. Maintenance and exploitation.
4. Lowering and saving.

Question type: conceptual

Section 7.2 Principles of Mercantilism

8. Which of the following is NOT a mercantilist principle?

1. States must make sure that most of the products and services they need are produced domestically.
2. Imports of foreign goods should be limited.
3. It is necessary to support domestic manufacturers and merchants.
4. Export of all goods is prohibited.

Question type: applied

Section 7.2 Principles of Mercantilism

9. In the nineteenth century many European states long considered the _____ colonies as ____ to their economies and national security, in keeping with mercantilist thinking.

1. Struggle for . . . vital.
2. Secession of . . . necessary.
3. Acquisition of . . . harmful.
4. Aspirations of . . . useful.

Question type: factual

Section 7.2 Principles of Mercantilism

10. Historically a state’s financial resources, or finances, consisted of

1. Foreign bonds.
2. Gems.
3. Gold reserves.
4. Paper money.

Question type: conceptual

Section 7.2 Principles of Mercantilism

11. Mercantilism has been linked with

1. Liberalism.
2. Constructivism.
3. Realism.
4. Feminism.

Question type: conceptual

Section 7.2 Principles of Mercantilism

12. Which approach to IPE is MOST associated with promoting state interests and economic strength?

1. Mercantilism.
2. Liberalism.
3. Constructivism.
4. Conflict theories.

Question type: conceptual

Section 7.2 Principles of Mercantilism

13. Protectionism is

1. The strategy of encouraging neighboring countries to provide a defensive alliance at low cost.
2. The belief that as long as military spending is kept high, a country is safe from foreign threats.
3. The policy of restricting or discouraging imports and encouraging domestic production.
4. The focus on securing national borders from threats of invasion.

Question type: conceptual

Section 7.2 Principles of Mercantilism

14. Which of the following is NOT a protectionist measure?

1. Economic sanctions.
2. Free trade.
3. Tariffs.
4. Import taxes.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

15. Maynard Keynes is a founder of

1. Microeconomics.
2. Macroeconomics.
3. The comparative advantage.
4. The balance of trade.

Question type: conceptual

Section 7.3 Economic Liberalism and the Formation of IPE

16. Which approach to IPE is MOST associated with promoting free trade?

1. Mercantilism.
2. Liberalism.
3. Constructivism.
4. Conflict theories.

Question type: conceptual

Section 7.3 Economic Liberalism and the Formation of IPE

17. Who of the following is NOT an economic liberalist?

1. Adam Smith.
2. David Ricardo.
3. Karl Marx.
4. Friedrich List.

Question type: conceptual

Page number: 229

18. Monetary policy is a concept generally associated with

1. Adam Smith.
2. Karl Marx.
3. Friedrich List.
4. John Maynard Keynes.

Question type: conceptual

Section 7.3 Economic Liberalism and the Formation of IPE

19. Fiscal policy refers to

1. When states raise taxes and use this money to create jobs.
2. The percentage of taxes compared to the total public deficit.
3. The collection of income tax from foreign corporations in a country.
4. The changing of the amount of money in circulation.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

20. Of the following, who is MOST strongly associated with monetarism?

1. Milton Friedman.
2. Franklin D. Roosevelt.
3. Friedrich List.
4. Maynard Keynes.

Question type: applied

Section 7.3 Economic Liberalism and the Formation of IPE

21. Milton Friedman’s main works were written

1. During the American revolutionary wars.
2. In the 1960s.
3. Before the Great Depression.
4. During the Reagan administration.

Question type: conceptual

Section 7.3 Economic Liberalism and the Formation of IPE

22. When the Federal Reserve, the central banking system in the United States, maintains the stability of the financial system, this is called

1. Stability pact.
2. Monetarism.
3. Balancing act.
4. Fiscal policy.

Question type: applied

Section 7.3 Economic Liberalism and the Formation of IPE

23. Who of the following is MOST closely associated with applying liberal economic principles?

1. Barack Obama.
2. Margaret Thatcher.
3. Angela Merkel.
4. Vladimir Putin.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

24. The World Bank and International Monetary Fund were created in

1. 1944.
2. 1973.
3. 1919.
4. 1933.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

25. GATT stands for

1. Global Association for Temporary Tariffs.
2. General Agreement on Tariffs and Trade.
3. Global Accord on Tangible Trade.
4. General Agreement on Transport Tariffs.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

26. GATT was replaced by the

1. Global Trade Consortium.
2. World Trade Organization.
3. World Commerce Association.
4. Global Trade Convention.

Question type: factual

Section 7.3 Economic Liberalism and the Formation of IPE

27. How many members does the WTO have?

1. The same number as UN member states.
2. Less than 100.
3. Nearly 160.
4. About 45.

Question type: applied

Section 7.3 Economic Liberalism and the Formation of IPE

28. Critics of the WTO argue the following, EXCEPT

1. Free trade benefits mostly rich countries.
2. WTO rules harm small business.
3. Small countries can exercise less influence in the rounds of talks.
4. The negotiation rounds for new WTO rules are too short.

Question type: conceptual

Section 7.4 Constructivism and IPE

29. Which approach to IPE is MOST associated with investigating the impact of the investment climate?

1. Mercantilism.
2. Liberalism.
3. Constructivism.
4. Conflict theories.

Question type: applied

Section 7.4 Constructivism and IPE

30. _____ believe that the Marshall Plan was not only an economic policy but also a way to promote beliefs in free markets.

1. Constructivists.
2. Realists.
3. Feminists.
4. Liberalists.

Question type: conceptual

Section 7.4 Constructivism and IPE

31. Who argues that material resources and economic policies are often seen through the prism of collective values or individual beliefs?

1. Realists.
2. Feminists.
3. Liberalists.
4. Constructivists.

Question type: applied

Section 7.4 Constructivism and IPE

32. Places perceived as _____, as a rule, ____ international investors.

1. Corrupt . . . lose.
2. Safe . . . attract.
3. Risky . . . maintain.
4. Volatile . . . lure.

Question type: conceptual

Section 7.5 Marxism and Conflict Theories: Radical Criticisms of IPE

33. Which approach to IPE is MOST associated with the role and impact of economic injustice?

1. Mercantilism.
2. Liberalism.
3. Constructivism.
4. Conflict theories.

Question type: applied

Section 7.5 Marxism and Conflict Theories: Radical Criticisms of IPE

34. The failure of all of the following economies disenchanted many Marxist sympathizers except this one.

1. Soviet Union.
2. Cuba.
3. North Korea.
4. Mexico.

Question type: conceptual

Section 7.5 Marxism and Conflict Theories: Radical Criticisms of IPE

35. Raul Prebisch to Hans Singer is like

1. Karl Marx to Vladimir Lenin.
2. Adolf Hitler to Winston Churchill.
3. Adam Smith to Donald Trump.
4. Franklin D. Roosevelt to Ronald Reagan.

Question type: conceptual

Section 7.5 Marxism and Conflict Theories: Radical Criticisms of IPE

36. Dependency theory explains in relatively simple terms the main causes of the world’s

1. Economic and political problems.
2. Sociocultural interdependence.
3. Cultural rivalries.
4. Sociopolitical achievements.

Question type: conceptual

Section 7.6 Critical Applications

37. Which of the following states pursued a policy of autarky?

1. North Korea.
2. Brazil.
3. India.
4. Venezuela.

Question type: factual

Section 7.6 Critical Applications

38. He opposed Communist rule and later, as president, he promoted free trade:

1. Lech Walesa of Poland.
2. Robert Mugabe of Zimbabwe.
3. Fidel Castro of Cuba.
4. Hugo Chavez of Venezuela.

Question type: factual

Section 7.6 Critical Applications

39. Which Communist leader moved decisively toward capitalism?

1. Kim Il-sung.
2. Fidel Castro.
3. Envar Hoxha.
4. Deng Xiaoping.

Question type: factual

Section 7.6 Critical Applications

40. ______________ was a populist who believed in dependency theory.

1. Fidel Castro.
2. Kim Il-sung.
3. Muammar Qaddafi.
4. Hugo Chavez.

Question type: applied

Section 7.6 Critical Applications

41. After 2006, Iran openly pushed the development of _______.

1. Its nuclear program.
2. Its oil independency.
3. Its Middle East alliance.
4. Its green revolution.

Question type: applied

Section 7.6 Critical Applications

42. After the terrorist attacks of September 11, 2001,

1. The water reserves in the Middle East were at a drastic low.
2. Air traffic remained undisturbed.
3. The world’s stock markets fell drastically.
4. The United States pursued a dovish foreign policy.

Question type: applied

Section 7.6 Critical Applications

43. Speculators generally ____financial markets ____.

1. Keep . . . secure.
2. Make . . . volatile.
3. Maintain . . . safe.
4. Cause . . . to stop fluctuating.

Question type: factual

Section 7.6 Critical Applications

44) China’s Belt and Road Initiative seeks to link

1. China with Japan.
2. Africa with the Middle East.
3. East Asia with Europe.
4. South America with North America.

Question type: factual

Section 7.6 Critical Applications

45. The combination of high inflation and no growth in the late 1970s was called

1. Stop-and-go.
2. High-no.
3. Stagflation.
4. Hyperinflation.

Question type: factual

Section 7.6 Critical Applications

46. The ____________ calls for maximum deregulation of production and finances in order to boost inefficient economies.

1. Fukuyama Prescription
2. Dependency Prescription
3. China Solution.
4. Washington Consensus.

Question type: factual

Section 7.6 Critical Applications

47. Approximately ______ people live on less than $1.90 per day.

1. 200 million.
2. 450 million.
3. 700 million.
4. 2 billion.

Question type: factual

Section 7.6 Critical Applications

48. China has the world’s ________ largest economy.

1. Second.
2. Third.
3. Fourth.
4. Fifth.

Question type: factual

Section 7.6 Critical Applications

49. Chinese leader Xi Linping

1. Seeks to increase China’s global economic power.
2. Is elected by the entire adult Chinese citizenry.
3. Has called for the abolition of the communist party.
4. Has dramatically decreased military spending.

Question type: applied

Page number: 254

50. When realist analysts compare the annual GDP of the United States and China, they most likely examine

1. Power relations.
2. The economic outlook.
3. Defense budgets.
4. Car sales in both countries.

Short-Answer Questions

1. What does IPE stand for? Explain the concept using an empirical example.

2. Why is the GDP of a country an important measure for realists?

3. Define the concept of balance of trade.

4. Describe the term protectionism.

5. Name and define the basic principles of mercantilism.

6. What is a zero-sum game?

7. List and explain some of the beliefs held by economic liberalists.

8. Who was Adam Smith and why is he important for economic liberalism?

9. What is the night watchman concept?

10. Who is John Maynard Keynes and why is he important for international political economy?

11. What is macroeconomics?

12. Explain the term monetary policy.

13. What is the Bretton Woods system?

14. Name and define some trade barriers.

15. How would constructivists define the Marshall Plan?

16. Define the concept of fair trade.

17. What is Jeffrey Sachs’s model to fight poverty?

18. How did the United States react to Chinese economic development from the 1980s onward?

19. What domestic factors help explain the economic rise of China?

20. Who are the main actors in IPE?

21. What are the main tenets of dependency theory?

22. What are multinational corporations and why are they controversial?

23. What is outsourcing?

24. What is the brain drain and how can it hurt economic development in the Global South?

25. What is China’s Belt and Road Initiative?

Essay Questions

1. Drawing on empirical examples of the 2008-203 global financial situation, discuss both Keynesian and economic liberal approaches to coping with looming economic issues.

2. Why is Marxism mostly irrelevant for explaining international political economy today? What historical factors help explain this?

3. What are the key principles of dependency theory? Is it still relevant today? Discuss.

4. Compare and discuss the concepts of trade surplus and trade deficit in global trade. Why would you choose one over the other?

5. Using different theoretical frameworks presented in this chapter, discuss why global poverty has not been eradicated as of today.

6. Describe and discuss Deng’s economic policies to evaluate China’s role in the world economy today.

7. Write an essay in which you examine the importance of trade to international political economy and for domestic economies. Include discussions of the balance of trade and trade barriers.

8. What are the basic tenets of mercantilism? What has supplanted it, and why?

9. Compare, contrast, and analyze mercantilist, liberal, constructivist, and dependency theory approaches to international political economy. Which approach, or combination of approaches, do you think best captures current reality? Why?

10. What are the key principles of economic liberalism? How do they contrast with Keynesianism?

11. Discuss the nature and impact of protectionism and economic sanctions. Are they ever advisable? Defend your position.

12. What are the important aspects of Keynesian economics? When were they first applied? Why are they still considered relevant today?

13. What is the Washington Consensus and how does it affect developing countries? Why is it controversial?

14. What are the different approaches to promoting development in the Global South? Which do you think is preferable? Why?

15. Write an essay about China’s rise to a major economic power. What factors explain this rise? What was the response of the United States and other major powers? What are potential future problems?

16. What are the positive and negative aspects of President Trump’s trade policies? What are the potential long-term consequences?