ECON 1100 – Global Economics (Section 01) Exam #4 – Spring 2009 (Version B) Multiple Choice Questions (212 points each): 1. From the middle of 1921 through the middle of 1929, the U.S. economy was characterized by a. multiple crashes of the New York Stock exchange, which left most people in the country bankrupt. b. relatively low levels of both unemployment and inflation. c. very low inflation rates, but historically high levels of unemployment. d. a food shortage, resulting from the global food crises which occurred during World War II. 2. A “Special Economic Zone” is a. a government bureaucracy which directly determines how all economic resources will be used, by way of command planning. b. a geographical region in which the behavior of enterprises is constrained by fewer restrictions than in the rest of the country. c. a “commune,” in which production is “collectivized” and output is “shared equally among all households.” d. None of the above answers are correct. 3. Jeffrey Sachs a. was the first freely elected President of Poland, although he won the Polish election of 1991 amidst allegations of “voter fraud.” b. advised Poland to institute “Soviet Style Command Planning” in the late 1980’s, since their existing free market economy was clearly not working. c. acquired Norilsk Nickel (a Russian enterprise with annual revenues of $1.5 billion) for roughly $180 million as part of a “loans-for-shares” deal. d. None of the above answers are correct. 4. An “Iron Rice Bowl” refers to a. the emerging military power of China in the early part of the twenty-first century. b. a job within a Chinese State Owned Enterprise. c. the reforms instituted in Chinese agricultural starting in 1979. d. the helmets which Japanese Kamikaze pilots wore during World War II. 5. Much of the economic growth that occurred in China since 1978 was concentrated in ___________, which grew at a rate of 17.3% per year between 1978 and 1993. a. the “Pearl River Delta” region of the Guangdong Province b. the autonomous region of Inner Mongolia c. South Korea d. the highly productive agricultural regions of the Sichuan Province6. The “National Recovery Administration” was a. an attempt at “Command Planning” in the U.S. b. declared Unconstitutional by the Supreme Court in 1935. c. a series of free market reforms instituted in the Soviet Union under the leadership of Nikita Khrushchev in late 1950’s and early 1960’s. d. None of the above answers are correct. 7. The economic system which has emerged in China could be described as “Socialism with Chinese Characteristics.” This system a. is one in which the assets of much of the industrial sector are owned by the state, but in which the primary functions of coordination are performed by the market. b. is one in which most assets are privately owned, but all decisions regarding the use of resources are made by the government. c. relies entirely upon free markets to allocate all economic resources. d. None of the above answers are correct. 8. The “Catch-up effect” suggests that, all other factors fixed, a. those economies with currently low levels of GDP will tend to experience higher GDP growth rates. b. the global economy is “rigged against new entrants,” in that there is no way for poor countries to catch-up with rich countries. c. whenever a countries experiences rapid growth in GDP, they must also experience an increase in income inequality. d. demand for a good will decrease as a result of an increase in the price of a complement good (e.g., demand for catsup would decrease if the price of French fries were to increase). 9. As part of the voucher privatization in Russia in the 1990’s, which group of Russian citizens was eligible to claim vouchers which could ultimately be exchanged for ownership claims in enterprises by way of “auction like purchases”? a. Only “communist Party elites.” b. Only veterans of the “Red Army.” c. Only Children, since in the words of Russian President Boris Yeltsin, “I believe the children are our future; give them ownership shares in industry and let them lead the way.” d. All Russian citizens. 10. The Asian countries which experienced tremendous growth during the second half of the twentieth century typically had ___________ during their period of growth. a. large government budget deficits. b. relatively high individual savings rates and high rates of private investment. c. an emphasis on education (leading to increases in human capital). d. More than one of the above answers is correct.11. Between 10/9/07 and 3/9/09, the Dow Jones Industrial Average a. decreased in value by 39.12%, the largest percentage decrease in its value since the 45.08% decrease around the time of the Watergate scandal in the early 1970’s. b. decreased in value by 53.78%, the largest percentage decrease in its value since the 85.98% decrease between 1930 and 1932 (during the early years of the Great Depression). c. decreased in value by 92.43%, the largest percentage decrease in the value of the DJIA ever. d. increased in value by 2.29%, because the tremendous increase in value which occurred after the election of Barack Obama offset the decrease in value which resulted from the failed economic policies of George Bush. 12. The “end of communism” in Europe began in a. Czechoslovakia b. France c. the Soviet Union d. Poland 13. From 1965 through 1990 the “Asian Tigers” and “New Tigers” experienced a. large decreases in per capita GDP, but tremendous decreases in income inequality. b. tremendous growth in per capita GDP, along with decreases in income inequality. c. tremendous growth in per capita GDP, along with increases in income inequality. d. no change in per capita GDP, but tremendous increases in income inequality. 14. A Keiretsu refers to a. a large network of small, family-owned enterprises. b. a coalition or network of large enterprises with “interlocking business relationships and/or shareholdings.” c. a large business conglomerate, typically owned by a single family, operated with authoritarian management and with substantial government assistance. d. None of the above answers are correct. 15. Suppose that in 2009 the Per Capita GDP of “Country Y” is $10,000. If the Per Capita GDP of this country grew at a constant rate of 10% per year,
View Full Document
Unlocking...