ECON 1100 – Global Economics (Section 08) Exam #4 – Spring 2008 (Version A) – Answer Key Multiple Choice Questions (212 points each): 1. From the middle of 1921 through the middle of 1929, the U.S. economy was characterized by d. tremendous increases in per capita GDP. 2. Under “command planning” in the Soviet Union d. More than one of the above answers is correct. 3. The Balcerowicz Group c. was led by Leszek Balcerowicz, who served as Finance Minister and Deputy Prime Minister in the new Solidarity government in Poland. 4. The “Household Responsibility System” d. More than one of the above answers is correct. 5. Which of the following caused an “Oil Crisis” in the 1970’s? a. The Oil Embargo imposed by Arab members of OPEC during the Yom Kippur War. 6. _______________ was the leader of China during the time when the country implemented a system of “Soviet style Command Planning.” c. Mao Zedong 7. “Black Thursday” refers to a. the U.S. stock market crash which occurred on Thursday, 10/24/1929, at the start of what would become the Great Depression. 8. Between 1978 and 1996, the Chinese economy experienced c. a doubling of per capita income between 1978 and 1987, followed by another doubling of per capita income between 1987 and 1996. 9. The “National Recovery Administration” was d. More than one of the above answers is correct. 10. ____________ became known as “Europe’s New Tiger,” because of its strong economic performance starting in the mid 1990’s. d. Poland11. 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 b. establishment of Special Economic Zones within China. 12. During the 1920’s many individual investors in the U.S. purchased stock “on margin,” meaning that they c. borrowed money in order to purchase stock. 13. ____________ was the leader of the Soviet Union when the Solidarity Party gained political control of Poland during the semi-free elections of 1989. a. Mikhail Gorbachev 14. ____________ was known as the “trust buster,” having launched anti-trust suits during his administration that led to the breakup of over 40 monopolies. c. Theodore Roosevelt 15. _______________ refers to the movement launched by Mao Zedong to rid China of “liberal bourgeoisie elements” and continue “revolutionary class struggle.” c. The Cultural Revolution 16. Madagascar experienced a per capita GDP growth rate of roughly 5% in 2007. If they were to continue to experience this rate of per capita GDP growth, then by the “Rule of 70” their per capita GDP would double in roughly ______ years. b. 14 17. The economic system which has emerged in China could be described as “Socialism with Chinese Characteristics.” This system 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 economic coordination are performed by the market. 18. During much of the 1970’s the U.S. economy experienced d. None of the above answers are correct. 19. In comparison to the “free market outcome,” imposing a price ceiling of $4.00 would decrease Producers’ Surplus by c. area (c) plus area (g) 20. Imposing a price ceiling of $4.00 would create a Deadweight-Loss equal to b. area (f) plus area (g). 21. If a price floor of $10.80 were imposed in this market, then b. exactly 7,800 units would be traded.22. “Loans-for-Shares” refers to c. a program under which the Russian government used shares in public enterprises as collateral for loans from the private sector, with no intention of ever repaying the loans. 23. Regulation in the U.S. began with the creation of the ______________ in 1887 to regulate the behavior of railroads. a. Interstate Commerce Commission 24. Lech Wałęsa a. was the first freely elected President of Poland. 25. The World Trade Organization a. accepted China as an official member in late 2001. 26. 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. 27. 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. b. the “Pearl River Delta” region of the Guangdong Province 28. Following economic reform in Russia a. income inequality increased. 29. Individual stock ownership in the U.S. c. increased over the course of the 1920’s. 30. The non-violent 1989 revolution in Czechoslovakia that led to the overthrow of the communist government was known as b. The Velvet Revolution. 31. Jeffrey Sachs c. advised Poland to institute “Shock Therapy” in order to reform their economy. 32. Following the Great Depression, the U.S. b. embraced regulation and government intervention in the economy, but did not become a “planned economy” like many countries in Europe. 33. ______________ was the title given to the programs initiated by Franklin Roosevelt between 1933 and 1938 with the goal of providing “relief, recovery, and reform” during the Great Depression. b. The New Deal34. As part of Russia’s program of “voucher privatization” c. ownership of the Bolshevik Biscuit Factory was privatized via “auction.” 35. An “Iron Rice Bowl” refers to c. a job within a Chinese State Owned Enterprise. 36. Which of the following was a part of the “Gaidar Reforms” introduced in Russia? c. The creation of a “Social Safety Net,” including unemployment compensation. 37. As part of his New Economic Policy, Richard Nixon b. implemented price controls in an unsuccessful attempt to curb inflation. 38. _________ means “openness” in Russian, referring to the shift toward openness and transparency in governmental decision making, along with freedom of access to information, in Soviet society. c. Glasnost 39. Economic reform was instituted by way of “Shock Therapy” in c. Poland, shortly after the Solidarity Party came to power. 40. The “Township and Village Enterprises”
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