Verified Test Bank Chapter 5 US Economic Puzzle Neo-What?

Chapter 5

Multiple Choice Questions

1. Which of the following was not established as a global economic institution shortly after World War II?

a. The General Agreement on Tariff sand Trade (GATT)

b. The World Trade Organization (WTO)

c. The International Monetary Fund (IMF)

d. The World Bank

2. What does neoliberal economic theory emphasize?

a. State regulation of trade

b. Protection of home industries

c. Free markets

d. Subsidizing domestic industries

3. What region of the United States tends to support export-oriented policies that favor manufacturing?

a. The Northeast

b. The Midwest

c. The South

d. The Southwest

4. Which of the following is like to oppose international free-trade trade agreements?

a. The Chamber of Commerce

b. The Department of Commerce

c. IBM

d. The AFL-CIO

5. Which of the following describes “fast track” authority?

a. It gives Congress the authority to revise trade treaties

b. It gives the president the power to impose trade treaties without the advice and consent of the Senate

c. It requires the Congress to vote up or down on trade agreements without be able to amend them

d. It allows the U.S. Trade Representative to veto international trade agreements

6. What agency decides how much money should be in circulation in the United States?

a. The Federal Reserve Board

b. The International Monetary Fund

c. The Department of the Treasury

d. The Congress

7. What U.S. Secretary of State was instrumental in getting Congress to pass the Reciprocal Trade Agreements Act?

a. Henry Kissinger

b. Hillary Clinton

c. Cordell Hull

d. Dean Acheson

8. What Chair of the Federal Reserve was blamed for irresponsible lending practices and poor oversight of financial institutions after the onset of the financial crisis of 2008?

a. Alan Greenspan

b. Ben Bernanke

c. Paul Volcker

d. Janet Yellen

9. What was the thrust of America’s foreign economic policy before World War I?

a. Strongly neo-mercantilist

b. Strongly opposed to tariffs

c. Favored the acquisition of natural resources from overseas

d. There was no coherent foreign economic policy

10. Which of the following was a cause of the establishment of new industries in America to provide previously imported goods like cotton, textiles, and iron?

a. The Bessemer process

b. The Irish famine

c. The War of 1812

d. The Louisiana Purchase

11. With westward expansion, what U.S. export grew dramatically?

a. Grain

b. Ships

c. Chemicals

d. Timber

12. Which of the following founding fathers strongly advocated establishing a national bank in the U.S.?

a. Thomas Jefferson

b. John Adams

c. Alexander Hamilton

d. Aaron Burr

13. What is one of the objectives of the monetary policy of the Federal Reserve?

a. Determine tariff rates

b. Maintain high employment

c. Regulate the stock market

d. Oversee the quality of corporate bonds

14. Which of the following best describes the U.S. immediately after World War I?

a. A young creditor

b. A mature creditor

c. A young debtor

d. A mature debtor

15. What was the result of America’s Smoot-Hawley tariff in 1930

a. Overall U.S. trade fell dramatically

b. The Great Depression came to an end

c. American exports markedly increased

d. American imports markedly increased

16. Which of the following was a virtue of the gold standard?

a. Stable currency exchange rates

b. Limited inflation

c. Facilitated trade

d. All of the above

17. What is the effect of currency devaluation?

a. Decrease exports

b. Increase imports

c. Increase exports

d. None of the above

18. What was the purpose of the Reciprocal Trade Agreements Act?

a. To increase tariffs on foreign imports

b. To facilitate tariff reductions that were matched by similar concessions by others

c. To provide loans and subsidies to U.S. export industries

d. To protect America’s growing automobile industry

19. What agency oversaw the gold-exchange standard?

a. The Federal Reserve

b. The World Bank

c. The International Monetary Fund

d. The Department of the Treasury

20. What institution was established to facilitate reconstruction after World War II?

a. The Group of 7 (G-7)

b. The World Bank

c. The World Economic Forum

d. The Export-Import Bank

21. What does the “Washington Consensus” refer to?

a. A belief in the superiority of economic reforms that reduced government economic intervention

b. A belief in the utility of trade quotas

c. A belief in the importance of the welfare state

d. A belief in economic benefit of low global interest rates

22. Which of the following is a common condition for international loans in most Structural Adjustment Programs?

a. Increased government welfare expenditures

b. Higher state pensions

c. Budget deficit reduction

d. Nationalizing private industries

23. Which of the following was among the first events in the onset of the 2008 financial crisis?

a. The failure of Greece to meet its debt obligations

b. The failure of a major U.S. investment bank

c. The refusal of the IMF to lend money to Mexico

d. A significant decline in Chinese imports

24. Which post-World War II U.S. president dismantled government regulations in key economic sectors?

a. George H. W. Bush

b. Richard M. Nixon

c. Lyndon Johnson

d. Ronald Reagan

25. What trend preceded the 2008 global financial crisis?

a. Rapidly rising U.S. housing prices

b. A decline in the value of the U.S. dollar

c. A decline in mortgage lending in the U.S.

d. The collapse of Japan’s currency

26. Which of the following policies did the Federal Reserve adopt in response to the 2008 global financial crisis?

a. It announced the actions it would take in the future

b. It reduced interest rates

c. It printed money electronically, which it used to purchase mortgages from banks

d. All of the above

27. What is the Group of 20 (G-20)?

a. A group of wealthy North American and European countries plus Japan

b. A group of wealthy countries and middle-income emerging economies

c. A group of poor less-developed countries

d. A group of the world’s leading agrarian societies

28. What was one of the major objectives of the BRICS?

a. Acquiring greater authority in international economic institutions

b. Decreasing international lending by the IMF

c. Providing greater foreign aid to countries in Africa

d. Closing down the World Trade Organization

29. What was the aim of Basle III?

a. Adding additional conditions to international loans

b. Forcing the United States to end quantitative easing

c. Enhancing the global banking regulatory framework

d. Allowing the European Central Bank to adopt quantitative easing

30. According to liberal trade theory, what is the effect of free trade?

a. It increases global unemployment

b. It reduces prices for consumers

c. It reduces global competition

d. It favors economically advanced societies

31. Which of the following is a non-tariff barrier to trade?

a. Quotas

b. Subsidies

c. Local content requirements

d. All of the above

32. Why are trade agreements difficult to achieve?

a. Some countries import more than they export

b. International trade has global consequences

c. International trade drives up global debt

d. International trade has domestic consequences

33. Which of the following is a criticism of free-trade agreements?

a. It involves a loss of domestic jobs as firms locate elsewhere to reduce costs

b. It encourages the growth of global monopolies

c. It increases the economic power of a few great powers

d. All of the above

34. What was the first significant regional trade pact in which the U.S. was a member?

a. The U.S. –EU Transatlantic Trade Investment Partnership

b. The Free Trade Agreement of the Americas

c. The North American Free Trade Agreement

d. The Trans-Pacific Economic Partnership

35. What institution did the Uruguay Round of trade negotiations establish?

a. The World Trade Organization

b. The World Trade Forum.

c. The Bank for International Settlements.

d. The Asian Development Bank.

36. What is the “most favored nation” norm in international trade”?

a. Countries should not import products from authoritarian states

b. Countries should eliminate all tariffs

c. Countries should not discriminate among trade partners

d. Countries should only participate in trade talks sponsored by the GATT

37. What was a key reason for the initial failure of the Doha Round of trade negotiations?

a. The sale of genetically modified American grain to Europe

b. The use of subsidies in the developing world to protect domestic agricultural producers

c. The high tariff on manufactured goods in the developed world

d. The presence of pesticides in agricultural exports from Africa

38. Which of the following countries refused to ratify a 2013 global trade agreement without an arrangement to allow developing countries to maintain food-subsidy programs that provide food security for their populations?

a. China

b. Egypt

c. India

d. Brazil

39. What corporation is America’s largest exporter by value of exports?

a. Microsoft

b. Boeing

c. Google

d. Walmart

40. What trade agreement was strongly opposed by Venezuela President Hugo Chávez?

a. The U.S.-Chile Free Trade Agreement.

b. The Free Trade Agreement of the Americas.

c. The North American Free Trade Agreement.

d. The Bolivarian Alliance for the Americas.

Essay Questions

41. What countries constitutes the BRICS?

42. What was the 1988 Omnibus Trade and Competitiveness Act?

43. What was the gold standard?

44. What is a managed float system?

45. What was the gold-exchange standard?

46. What is “quantitative easing”?

47. What was “embedded liberalism”?

48. What do critics refer to as “Boeing’s bank”?

49. What is “intellectual property”?

50. What did the United States-European Union High Level Working Group on Jobs

a. Answers vary; It fostered the opening of U.S.-EU trade negotiations for The Transatlantic Trade and Investment Partnership.