ECON 1100 – Global Economics (Section 09) Exam #4 Answer Key – Fall 2007 (Version D) Multiple Choice Questions (212 points each): 1. The “Great Leap Forward” refers to b. 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. 2. Which of the following corporations is NOT a Chaebol? b. Mitsubishi 3. 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. c. the “Pearl River Delta” region of the Guangdong Province 4. The World Trade Organization c. was created on 1/1/1995, as a successor to GATT. 5. The Singapore economy a. has a relatively high level of government intervention, with an emphasis on attracting investment from large multi-national corporations. 6. The non-violent 1989 revolution in Czechoslovakia that led to the overthrow of the communist government was known as a. the Velvet Revolution. 7. The Asian countries which experienced tremendous growth during the second half of the twentieth century typically had ___________ during their period of growth. b. relatively low rates of inflation 8. Which of the following was NOT a characteristic of Chinese economic reform? a. “Shock Therapy.” 9. A “Special Economic Zone” is b. a geographical region in which the behavior of enterprises is constrained by fewer restrictions than in the rest of the country. 10. Under a “Floating Exchange Rate” system b. the value of a currency is allowed to fluctuate and is determined within the “foreign exchange market.”11. Which of the following was NOT a part of the “Gaidar Reforms” introduced in Russia? b. The introduction of price controls in an attempt to stop inflation. 12. An “Iron Rice Bowl” refers to b. a job within a Chinese State Owned Enterprise. 13. One “notable failure of Japanese industrial policy” during the second half of the twentieth century was a. the attempts by the Japanese government to have Honda focus on motorbike production as opposed to automobile production. 14. The financial crises which spread through Asia in 1997-1998 were referred to as c. Contagion 15. Under “command planning” in the Soviet Union prices were c. set by the government agency Gosten. 16. _______________ refers to “close relations between businesses, banks, and government agencies, leading to ‘favoritism,’ ‘sweetheart deals,’ corruption, and poor corporate governance.” a. Crony Capitalism 17. A Chaebol is b. a large business conglomerate, typically owned by a single family, operated with authoritarian management and with substantial government assistance. 18. The Balcerowicz Group b. was led by Leszek Balcerowicz, who served as Finance Minister and Deputy Prime Minister in the new Solidarity government in Poland. 19. _________ means “openness,” referring to the shift toward openness and transparency in governmental decision making, along with freedom of access to information, in Soviet society. b. Glasnost 20. Which of the following countries was NOT one of the “New Tigers” (those countries which experienced tremendous growth starting in the late 1970’s and early 1980’s) d. South Korea 21. A lesson that could be taken away from the “Asian Miracle” is that b. industrialization and development need not be based upon “import substitution.”22. The “East Asian Financial Crisis” c. caused the stock market in Thailand to lose roughly 75% of its value in 1997. 23. The first enterprise to be privatized in Russia by way of “voucher auction” was b. the Bolshevik Biscuit Factory. 24. The “end of communism” in Europe began in a. Poland 25. _______ states that: all other factors fixed, those economies with currently low levels of GDP per capita will tend to experience higher rates of GDP growth. b. The Catch-up Effect 26. The “Township and Village Enterprises” that emerged in China in the early 1980’s were typically more efficient than “State Owned Enterprises” since they d. All of the above answers are correct. 27. The economic system currently in place in China, that of “Socialism with Chinese Characteristics,” is b. similar to the systems put in place in Britain and France after WW-II. 28. One of the unique characteristics of Chinese economic reform is “gradualism,” which could be described as b. reform which proceeded along a path of “experimentation,” moving forward only in areas where policies had been tested and seen to work. 29. Immediately following economic reform in Russia there was a. an increase in income inequality. 30. Jeffrey Sachs b. advised Poland to institute “Shock Therapy” in order to reform their economy. 31. “Solidarity” was b. a trade union federation founded in 1980 at the Lenin Shipyards in Poland. 32. The “Cultural Revolution” refers to b. a movement in China from 1966 to 1970 intended to “rid China of ‘liberal bourgeoisie elements’ and to continue ‘revolutionary class struggle.’”33. A current explanation for the “Asian Economic Miracle” is that the success of these countries was a result of following a “Market Friendly Approach,” which could be described as the notion that d. the market is efficient in the long term, but in the short term gains may come from selective government intervention. 34. The Czech Republic a. instituted a program of “Shock Therapy” in 1991, quite similar to that which was used in Poland during the previous year. 35. Mikhail Gorbachev a. instituted reforms known as perestroika and glasnost. 36. __________ refers to policies aimed at replacing imports of finished products with domestic production of the same goods. a. Import Substitution. 37. By 1988 a. roughly 90% of State Owned Enterprises in China were operated under the Contract Responsibility System. 38. In Russia between 1992 and 1996 b. large scale privatization took place, so that by 1996 over 70% of GDP was generated in the private sector. 39. Deng Xiaoping b. was the person most responsible for the economic reform and economic growth which has occurred in China since 1978. 40. As part of Russia’s program of “voucher privatization” c. 144 million (out of 147 million) Russians claimed vouchers which could be
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