ECON 1100 – Global Economics (Section 01) Exam #4 – Fall 2007 (Version A) Multiple Choice Questions (212 points each): 1. _________ was the leader of China during the time when the country implemented a system of “Soviet style Command Planning.” a. Mao Zedong b. Deng Xiaoping c. Hu Jintao d. Junichirō Koizumi 2. An “Iron Rice Bowl” refers to a. a job within a Chinese State Owned Enterprise. b. the emerging military power of China in the early part of the twenty-first century. c. the reform instituted in Chinese agricultural starting in 1979. d. the “Special Economic Zones” established in the Pearl River Delta region of China. 3. From 1965 through 1990 the “Asian Tigers” and “New Tigers” experienced a. tremendous growth in per capita GDP, along with increases in income equality. b. tremendous growth in per capita GDP, along with decreases in income equality. c. no change in per capita GDP, but tremendous increases in income equality. d. None of the above answers are correct. 4. A Keiretsu refers to a. a large business conglomerate, typically owned by a single family, operated with authoritarian management and with substantial government assistance. b. a government owned/operated enterprise, with the primary goal of “providing good working conditions to employees.” c. a coalition or network of large enterprises with “interlocking business relationships and/or shareholdings.” d. a large network of small, family-owned enterprises. 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. a profit maximizing monopolist. b. a government agency engaging in “rent seeking behavior.” c. individuals during a “bank run.” d. leaders of a militant labor union during a strike.6. The “semi-free elections of 1989” in Poland a. resulted in Jeffrey Sachs being elected President in a landslide victory over Leszek Balcerowicz. b. led to the collapse of Communism in Europe, as Mikhail Gorbachev told Communist leaders in Poland to accept the outcome of the elections. c. ultimately led to the splitting of Poland into the Czech Republic and the Slovak Republic. d. More than one of the above answers is correct. 7. Between 1978 and 1996, the Chinese economy experienced a. historically high levels of inflation and unemployment, accompanied by negative GDP growth. b. a rate of GDP growth greater than that of any other part of the world during the same time-period. c. a decrease in per capita incomes across all segments of society. d. All of the above answers are correct. 8. The economic system which has emerged in China could be described as “Socialism with Chinese Characteristics.” This system a. is one in which most assets are privately owned, but all decisions regarding the use of resources are made by the government. b. is one in which the assets of much of the industrial sector are owned by the state, but in which the primary functions of coordination are performed by the market. c. is the first instance of “Pure Communism” being instituted in the real world. d. None of the above answers are correct. 9. The “Household Responsibility System” a. was the central component of reform within the agricultural sector in China. b. was the central component of reform within State Owned Enterprises in China. c. led to a substantial decrease in agricultural production in China from 1979 through 1996. d. More than one of the above answers is correct. 10. Most of the countries affected by the East Asian Financial Crisis a. experienced the economic downturn because of the fact that they had virtually no foreign investment in their economies by the middle of the 1990’s. b. continued to realize negative rates of GDP growth well into the first decade of the twenty-first century. c. experienced a downturn that was “V-Shaped,” in that after a sharp contraction in 1998, positive growth returned in 1999 and 2000. d. More than one of the above answers is correct.11. Following economic reform in Russia a. income inequality decreased. b. income inequality increased. c. incomes increased dramatically across all segments of society. d. there was virtually no change in the distribution of incomes within society. 12. “Import Substitution” refers to a. policies aimed at getting people to increase their “individual savings rates.” b. policies aimed at replacing imports of finished products with domestic production of the same goods. c. government policies which make it easier for foreign firms to sell goods within their country. d. the idea that while the market is efficient in the long term, selective government intervention may lead to short term gains. 13. In Las Vegas there are many fewer restrictions on individual behavior than in most other cities in the U.S. (e.g. – gambling is legal, consumption of alcohol in public is legal, etc.). A parallel could be drawn between “the ‘different rules’ that people face when in Las Vegas” and the a. Contract Responsibility System established in China in the 1980’s. b. Cultural Revolution of Mao Zedong. c. establishment of Special Economic Zones within China. d. operation of Chaebols in South Korea. 14. Which of the following countries was NOT one of the “Asian Tigers” (those countries which experienced tremendous growth starting in the 1960’s) a. Japan b. Taiwan c. South Korea d. Singapore 15. ____________ became known as “Europe’s New Tiger,” because of its strong economic performance starting in the mid 1990’s. a. Poland b. Russia c. The Czech Republic d. Great Britain 16. Jeffrey Sachs a. advised all Eastern Europe economies to remain under “command planning.” b. was a strong supporter of “Shock Therapy” as a method of economic reform in Eastern Europe. c. was a strong supporter of gradual economic reform in Eastern Europe. d. None of the above answers are correct.17. “Loans-for-Shares” refers to a. low interest rate loans given to citizens in Russia, so that they had funds to purchase shares of privatized enterprises auctioned by the government. b. a program under which the government of the Czech Republic sold bonds to foreign investors in order to acquire funds to repurchase enterprises which they previously privatized. c. a program under which the Russian
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