ECON 1100 – Global Economics (Section 09) Exam #4 – Spring 2008 (Version C) Multiple Choice Questions (212 points each): 1. Perestroika a. means “restructuring,” referring to restructuring of the Soviet economy. b. means “openness,” referring to the shift toward openness and transparency in governmental decision making, along with freedom of access to information, in Soviet society. c. refers to a rapid movement away from central planning toward a market economy, characterized by an immediate elimination of price and currency controls, state subsidies to enterprises, and trade restrictions. d. refers to the movement launched by Mao Zedong to rid China of “liberal bourgeoisie elements” and to continue “revolutionary class struggle.” 2. The _____________ trigger a worldwide financial crisis, at the start of the “Great Depression.” a. creation of the Securities and Exchange Commission b. Stock Market Crash of 1929 c. “New Deal” d. assassination of Franz Ferdinand, Arch Duke of Austria 3. A “Special Economic Zone” is a. an international organization designed to supervise international trade and to promote free trade among member countries. b. a geographical region in which the behavior of enterprises is constrained by fewer restrictions than in the rest of the country. c. a State Owned Enterprise, which operates more efficiently than a privately owned enterprise. d. None of the above answers is correct. 4. _________ was co-founder of the labor federation Solidarity and President of Poland from 1990-1995. a. Ivan Drago b. Vladimir Potanin c. Jeffrey Sachs d. Lech Wałęsa 5. An “Iron Rice Bowl” refers to a. the tremendous maritime achievements of China in the 1400’s. b. the emerging military power of China in the early part of the twenty-first century. c. a job within a Chinese State Owned Enterprise. d. the reform instituted in Chinese agricultural starting in 1979.6. “Economies of Agglomeration” refer to a. the ability to curb inflation by imposing wage and price controls. b. benefits that firms obtain from locating near other firms. c. benefits that governments realize from decreasing the amount of resources used for military purposes. d. the creation of a special geographic region in which the behavior of enterprises is constrained by fewer restrictions than in the rest of the country. 7. Following the Great Depression, the U.S. a. embraced regulation and government intervention in the economy, but did not become a “planned economy” like many countries in Europe. b. entered a period in which economic performance remained poor for several decades. c. transformed into a “planned economy,” like many countries in Europe. d. abolished all regulation of business, in an attempt to increase economic prosperity by allowing firms to make larger profits. 8. The “Great Leap Forward” refers to a. the economic movement launched by Mao in the late 1950’s to “harness the ideological fervor of the Chinese population” to the task of raising economic output. b. the series of economic reforms instituted in China staring in December 1978 which moved China away from planning and toward free markets. c. the social movement launched by Mao in the 1960’s to rid China of “liberal bourgeoisie elements” and continue “revolutionary class struggle.” d. None of the above answers is correct. 9. In which of the following countries was economic reform instituted by way of “Shock Therapy”? a. In Great Britain, when Margaret Thatcher was Prime Minister. b. In China, when Deng Xiaoping was the de facto leader. c. In the United States, when Richard M. Nixon was President. d. In Poland, when Lech Wałęsa was President. 10. 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. Singapore d. the highly productive agricultural regions of the Sichuan Province11. Jeffrey Sachs a. was a strong supporter of gradual economic reform in Eastern Europe. b. was a strong supporter of “Shock Therapy” as a method of economic reform in Eastern Europe. c. advised Franklin Roosevelt to use Keynesian Fiscal policy in order to get the United States out of the Great Depression. d. started the “Velvet Revolution” in Czechoslovakia in 1989. 12. Which of the following was NOT a characteristic of Chinese economic reform? a. “Gradualism.” b. “Partial Reform.” c. “Centralization.” d. “Economic Liberalization without Political Democratization.” 13. Farmers in the United States chose to drown baby chickens a. in protest of the lack of economic assistance provided by President Hoover (whose 1928 campaign slogan was “A chicken in every pot and a car in every garage.”) during the early years of the Great Depression. b. in response to the wage and price controls implemented as part of Richard Nixon’s New Economic Policy (since at the controlled prices it was no longer worthwhile for them to raise the chickens for meat). c. to protest the Oil embargo of the Arab members of OPEC during the 1973 Yom Kippur War. d. as a show of their support for businesses participating with the “codes of fair competition” established by the National Recovery Administration during the Great Depression. 14. The Federal Trade Commission was created in order to a. regulate financial markets. b. regulate the behavior of railroads. c. police bigness, restrict restraint of trade, and prevent unfair business practices. d. regulate all non-military aviation in the United states. 15. The “semi-free elections of 1989” in Poland a. began the collapse of Communism in Europe, as Mikhail Gorbachev told Communist leaders in Poland to accept the outcome of the elections. b. resulted in Boris Yeltsin being elected President in a landslide victory over Leszek Balcerowicz. c. ultimately led to the splitting of Poland into the Czech Republic and the Slovak Republic. d. None of the above answers are correct.16. Under “command planning” in the Soviet Union prices were a. set directly by Jeffrey Sachs. b. set by the government agency Gosten. c. set by The Red Army. d. determined by the free interplay of Supply and Demand. Answer Questions
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