ECON 1100 – Global Economics (Section 02) Exam #4 – Fall 2009 (Version B) Multiple Choice Questions (212 points each): 1. The Asian countries which experienced tremendous growth during the second half of the twentieth century typically had ___________ during their period of growth. a. relatively high rates of inflation b. an emphasis on education (leading to substantial increases in “human capital”) c. large government budget deficits (due to achieving their growth as a result of the “deficit spending” suggested by “Keynesian Fiscal Policy”). d. More than one of the above answers is correct. 2. As part of his “New Economic Policy” Richard Nixon a. established a series of programs which were called the “Great Society.” b. forced farmers to drown their chickens instead of sending them to market. c. implemented price controls in an unsuccessful attempt to curb inflation. d. More than one of the above answers is correct. 3. If the overall price level in an economy is currently decreasing, then the economy is experiencing a. Hyperinflation b. Deflation c. Stagnation d. a Misery Index. 4. Which of the following events bolstered patriotism within Great Britain and increased Margaret Thatcher’s popularity, allowing her to remain in office as the Prime Minister following the June 1983 general election in the U.K.? a. The success of British athletes in the 1982 Summer Olympics in San Diego, CA. b. The complete elimination of income taxation in Great Britain, which led to Britons having more “disposable income” than ever before. c. The military success of Britain over Argentina in the Falklands War from April 1982 to June 1982. d. The government support and ultimate international success of “The Beatles” (and other popular British entertainers), which enhanced the image of Great Britain throughout the world. 5. The “end of communism” in Europe began in a. the Czech Republic. b. the Slovak Republic. c. the Soviet Union. d. Poland.6. Under “command planning” in the Soviet Union prices were a. determined by the free interplay of Supply and Demand. b. set directly by the “Marshal of the Soviet Union” (the highest ranking individual in the Soviet Red Army). c. set directly by Michael Boskin, a former economic advisor to President George H.W. Bush. d. set by the government agency Gosten. 7. The Unemployment Rate in the U.S. reached 10.20% in October 2009. This is a. the first time the Unemployment Rate has been above 10% in the U.S. since June 1983. b. the highest in the history of the U.S. c. not the highest rate in the history of the U.S., but is the highest rate since the Great Depression. d. the lowest Unemployment Rate in the U.S. since April 1964. 8. The “Catch-up effect” suggests that, all other factors fixed, a. demand for a good will decrease as a result of an increase in the price of a complement good (e.g., demand for ketchup would decrease if the price of French fries were to increase). b. those economies with currently low levels of GDP will tend to experience higher GDP growth rates. c. the global economy is “rigged against new entrants,” in that there is no way for poor countries to catch-up with rich countries. d. whenever a countries experiences rapid growth in GDP, they must also experience an decrease in income inequality (i.e., during times of growth the “poor” tend to “catch-up” to the “rich”). 9. As part of the voucher privatization in Russia in the 1990’s, which group of people 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 Russian 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.” c. All Russian citizens. d. Wealthy American capitalists, as a condition of the “Strategic Arms Reduction Treaty” (a.k.a., “START”) which was ratified on July 31, 1991. 10. Lech Wałęsa a. led the “Cultural Revolution” in Russia in the early 1980’s. b. was the leader of the violent political revolution known as the “Reign of Terror” which took place in Poland in the mid 1970’s. c. was the first freely elected President of Poland, serving from 1990 through 1995. d. More than one of the above answers is correct.11. ________ means “restructuring,” referring to restructuring of the Soviet economy. a. Preevyet b. Glasnost c. Gossnab d. Perestroika 12. The U.S. Federal government enacted environmental policies with an aim of “more than just protecting/conserving untouched resources” for the first time a. as part of Woodrow Wilson’s “Fourteen Points.” b. as part of Franklin Roosevelt’s “New Deal.” c. as part of Lyndon Johnson’s “Great Society.” d. as part of Richard Nixon’s “New Economic Policy.” 13. “Solidarity” a. was an oil cartel formed by Russia and other Soviet Bloc countries in the late 1980’s. b. gained political control of Poland in the “semi-free elections of 1989.” c. was a Malaysian automotive company which went bankrupt in 1997 (leading to the loss of 90,000 jobs) during the East Asian Financial Crisis. d. was the name given to the economic policies implemented by British Prime Minister John Major in the 1990’s, which reversed essentially all of the changes made under Margaret Thatcher in the 1980’s. 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. Which of the following was a proper task of government in the opinion of Margaret Thatcher? a. Providing national defense. b. Ensuring that every citizen is able to exercise his “Right to Work.” c. Having the government acquire direct ownership of the “Commanding Heights” of the economy, in the interest of national security. d. More than one of the above answers is correct. 16. The “National Recovery Administration” was a. an attempt at “Indicative Planning” in
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