Econ 340 Alan Deardorff Winter Term 2014 Overview Study Questions Page 1 of 5 Study Questions Lecture 1 Overview of the World Economy Part 1: Multiple Choice Select the best answer of those given. 1. How many countries are there in the world? a. Fewer than ten b. Between 10 and 100 c. Between 100 and 500 d. More than 500 e. The number changes too rapidly to select among these answers. 2. Approximately what percentage of what the United States consumes is produced inside its borders? a. 2% b. 15% c. 50% d. 85% e. 98% 3. The less developed countries of the world trade mostly with a. Developed countries b. Other less developed countries c. Former communist countries d. Nobody. They do not trade e. None of the aboveEcon 340 Alan Deardorff Winter Term 2014 Overview Study Questions Page 2 of 5 4. At what date, approximately did or will the total GDP at market exchange rates of the “emerging economies” (as the term is used by The Economist) exceed that of the developed economies. a. 1998 b. 2008 c. 2018 d. 2028 e. Never 5. Which of the following is not an international capital flow? a. An American depositing money in a bank account in Zurich, Switzerland. b. A German buying a U.S. Treasury bill. c. A Canadian purchase of a Japanese-made automobile. d. A Brazilian firm borrows from an Argentine bank. e. A Korean car company buys a factory in California. 6. Which of the following countries was not one of those hit by the East Asian financial crisis of 1997? a. South Korea b. Indonesia c. Japan d. Thailand e. Malaysia 7. Comparing the extent of globalization today with 50 and 100 years ago, which of the following is not true? a. Trade as a fraction of GDP is greater today than it was 100 years ago. b. Trade as a fraction of GDP declined during the first half the 20th century. c. There is greater international movement of financial capital today than there was in 1950. d. The fraction of the US population that is foreign born was higher at the end of the 20th century than it was at the end of the 19th century. e. In the last 50 years, US trade as a fraction of US output of goods has grown from less than 10% to more than 20%.Econ 340 Alan Deardorff Winter Term 2014 Overview Study Questions Page 3 of 5 8. How do US tariffs today compare to what they were 60 years ago? a. Tariffs today have been eliminated; 60 years ago they averaged 100%. b. Tariffs today are only one tenth as large, on average, as they were then. c. Tariffs have been cut in half. d. Although different products have high tariffs than before, the average tariff is about the same. e. Recent concerns over outsourcing have pushed US tariffs about ten percentage points above what they were just after World War II. 9. Hufbauer and Greico say that some workers who lose their jobs due to trade liberalization suffer a loss of $240,000. How is that possible? a. This is the average yearly wage of workers in import-competing industries. b. Such workers typically lose their houses as well as their jobs, and this is mostly the value of their houses. c. This is a typographical error. They meant $24,000. d. This figure refers to the lifetime loss per worker, not the loss in just a single year. e. The hardest hit by trade liberalization are the CEOs of large corporations, who are highly paid. 10. Which of the following statements about losses from trade or trade policy is correct? a. The United States has lost from trade during the last fifty years, because its exports have risen more slowly than its GDP. b. Poor countries lose more than rich countries from the tariffs that exist today, because they face higher tariffs on their exports than the tariffs on developed-country exports. c. Poor countries are hurt by the structure of developed country tariffs, which are lowest on processed goods that developing countries are unable to produce. d. NAFTA hurt the Mexican manufacturing sector at the same time that it benefited Mexican farmers. e. The United States has little to gain from trade liberalization by developing countries, because only a negligible portion of our exports go to them.Econ 340 Alan Deardorff Winter Term 2014 Overview Study Questions Page 4 of 5 Part II: Short Answer Answer in the space provided. 1. Define the following terms: a. Openness b. Regional trade agreement c. Gross domestic product d. Shallow integration 2. The readings by powell (he seems to prefer the lower-case) and Bhagwati disagree on whether globalization is good or bad for the poor. What are some of their reasons? Do they seem to disagree on the facts, or only on which facts they pay attention to? 3. What country’s international trade is a larger fraction of total world trade than that of any other single country? 4. How do the exports and imports of the European Union, to and from countries outside the EU, compare to those of the United States? 5. a. Name one industry in which the United States is a major net exporter (that is, it exports more than it imports). b. Name one in which it is a major net importer.Econ 340 Alan Deardorff Winter Term 2014 Overview Study Questions Page 5 of 5 6. Based on the data reported in lecture for the U.S. investment position at the end of 2011, the U.S. was a net debtor internationally. Of the following three categories of assets, which accounted for the largest part of this net indebtedness? That is, in which category does the US ownership of assets abroad fall furthest below (in dollars) foreign ownership of assets in the U.S.? (Circle one) U.S. Government Assets / Private Financial Assets / Private Real Assets 7. What do the following acronyms stand for? a. WTO b. FDI c. IMF d. RTA e.
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