ECON 1100 – Global Economics (Section 02) Exam #4 – Spring 2009 (Version D) Multiple Choice Questions (212 points each): 1. Under “command planning” in the Soviet Union a. the industrial sector was very efficient and could produce more output with fewer inputs than enterprises in similar sectors in other countries. b. it was more expensive to take a cab from the airport in Moscow to Red Square than it was to fly from Vladivostok to Moscow. c. a large fraction of total productive resources were devoted to national defense. d. More than one of the above answers is correct. 2. There was an “Oil Crises” in the U.S. in the 1970’s as a result of a. the disruption of worldwide supply during the Iranian Revolution and the subsequent Iran/Iraq War. b. the election of Jimmy Carter in 1976, and the subsequent transfer of power from Ford to Carter. c. the environmental policies signed into law by President Nixon. d. More than one of the above answers is correct. 3. Glasnost 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 the government agency in the former Soviet Union which was in charge of establishing wages and labor policies. d. refers to the movement launched by Mao Zedong to rid China of “liberal bourgeoisie elements” and to continue “revolutionary class struggle.” 4. ________________ was the leader of the Soviet Union when the Solidarity Party gained political control of Poland during the semi-free elections of 1989. a. Dolph Lundgren b. Nikita Kruschev c. Mikhail Gorbachev d. Boris Yeltsin 5. One explanation for the spread of the currency crises from Thailand to other Asian economies was that investors engaged in behavior similar to that of a. individuals during a “bank run.” b. leaders of a militant labor union during a strike. c. a profit maximizing monopolist. d. an person trying to free ride on someone else’s provision of a public good.6. The “Dow Jones Industrial Average” a. is an investment fund founded in 1982 by Economist James Dow, which currently owns approximately 68% of all stock in U.S. companies. b. is the federal government agency, created as part of the “New Deal,” which oversees and regulates financial markets in the U.S. c. provides a “weighted average” of the stock prices of 30 large and widely held publicly traded U.S. companies (currently including AT&T, ExxonMobil, Home Depot, McDonald’s, and Walmart). d. provides a direct measure of “average expected profits (in dollar terms)” that a typical firm can expect to earn during the current year (given current macroeconomic conditions), to which shareholders can compare actual profits of a firm in order to assess CEO performance. 7. “Economies of Agglomeration” refer to a. benefits that governments realize from decreasing the amount of resources used for military purposes. b. benefits that firms obtain from locating near other firms. c. the acquisition of a private enterprise by the government (either with or without compensation to the original owners). d. a special geographic region in which the behavior of enterprises is constrained by fewer restrictions than in the rest of the country. 8. The Balcerowicz Group a. was led by Leszek Balcerowicz, who served as Finance Minister and Deputy Prime Minister in the new Solidarity government in Poland. b. supported economic reform in Poland by way of “Gradual Reform.” c. gained control of the Commanding Heights of the Polish Economy through “Voucher Privatization.” d. More than one of the above answers is correct. 9. In Russia, the ownership of many small shops was transferred to current managers, agricultural land was “decollectivized,” and apartments were sold to current occupants as a part of a. the “Pietlukiewicz Reforms.” b. “Small Scale Privatization.” c. the program of “Voucher Privatization.” d. the “Loans for Shares Deals.” 10. The Unemployment Rate in the U.S. reached 8.10% in February 2009. This rate a. is the highest rate in the history of the U.S. b. is not the highest rate in the history of the U.S., but is the highest rate since the Great Depression. c. is not even the highest rate in the last 30 years, since the unemployment rate was 8.30% or higher for 26 straight months from 1981 through December 1983. d. None of the above answers are correct.11. One of the distinguishing characteristics of economic reform in China was that the leaders in China often implemented “partial reform,” which refers to a. the novel approach of the Chinese government to partially base the decision of which enterprises to subsidize upon “relative export performance.” b. a recognition in hindsight that almost all of the reforms enacted in China were at best “partially successful.” c. the fact that individuals in China presently have a substantial amount of “Economic Freedom,” even though they have not yet realized “Chinese Democracy.” d. the willingness to create situations in which market reform is “incomplete,” thereby introducing incentives without completely altering the environment in which individuals must make decisions. 12. The “Misery Index” a. is an economic indicator created by Korean economist Yong-Kyun Bae in order to measure the negative effects of the East Asian Financial Crises on the Korean banking sector. b. is computed by taking the sum of (i.e., adding together the values of) the current unemployment rate to the current annual inflation rate. c. provides a measure of how many people in a country are clinically depressed. d. More than one of the above answers is correct. 13. __________________ was known as the “trust buster,” having launched anti-trust suits during his administration that led to the breakup of over 40 monopolies. a. Richard Nixon b. Lech Wałęsa c. Theodore Roosevelt d. Franklin Roosevelt 14. ________________________ refers to a series of domestic programs proposed by and initially enacted under the leadership of President Johnson in the 1960’s, with the two main goals of eliminating poverty and racial injustice. a. The New Deal b. The New Economic Policy c. The Great Society d. Shock and Awe
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