ECON 1100 – Global Economics (Section 03) Exam #4 – Fall 2008 (Version D) – Answer Key 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.” b. Mao Zedong 2. The “British East India Company” a. was an English corporation founded in 1600, which would establish trade routes between Great Britain, India, and China. 3. Currently China a. has a population of over 1.3 billion people (roughly 20% of the global population), making it one of the largest consumer markets in the world. 4. Under “command planning” in the Soviet Union d. More than one of the above answers is correct. 5. 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. 6. The current population of India is approximately c. 1,147,995,898, which is roughly 17.2% of the world’s population. 7. ___________________ became known as “Europe’s New Tiger,” because of its strong economic performance starting in the mid 1990’s. c. Poland 8. The “Mahalanobis Equation” a. expressed the entire Indian economy in a single mathematical equation. 9. 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. establishment of a “Special Economic Zone.” 10. _____________ was an economist who served as Finance Minister of India under Prime Minister Rao from 1991-1996, and is currently the Prime Minister of India. a. Manmohan Singh11. The non-violent 1989 revolution in Czechoslovakia that led to the overthrow of the communist government was known as b. The Velvet Revolution. 12. Jeffrey Sachs a. advised Poland to institute “Shock Therapy” in order to reform their economy. 13. _______________ refers to the “complex system of licenses, controls, regulation, and red-tape that influenced economic decisions at all levels of production, investment, and foreign trade in India’s private sector from 1947 through 1990.” c. The Permit Raj 14. “Economies of Agglomeration” refer to b. benefits that firms obtain from locating near other firms. 15. Which of the following policies was NOT supported by the Bharatiya Janata Party (BJP) when they came to power in March 1998? a. Reversing the market based economic reforms begun under Prime Minister Rao, and reinstituting the Permit Raj. 16. Perestroika c. means “restructuring,” referring to restructuring of the Soviet economy. 17. Which of the following was a part of the “Gaidar Reforms” introduced in Russia? c. The creation of a “Social Security System,” including unemployment compensation. 18. Economic reform was instituted by way of “Shock Therapy” in d. More than one of the above answers is correct. 19. Between 1978 and 1996, the Chinese economy experienced a. a rate of GDP growth greater than that of any other part of the world during the same time-period. 20. Bangalore has come to be known as c. “India’s Silicon Valley,” because of its emphasis on high-tech, Information Technology based industry. 21. Under “command planning” in the Soviet Union prices were b. set by the government agency Gosten. 22. _______________ refers to the movement launched by Mao Zedong to rid China of “liberal bourgeoisie elements” and continue “revolutionary class struggle.” b. The Cultural Revolution23. Following Indian’s Independence, Mahatma Ghandi’s vision for the Indian economy a. was one of “self reliance,” focusing on home production of basic goods, a “spinning wheel in every hut,” and self-sufficiency of every village. 24. “Loans-for-Shares” refers to b. 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. 25. An “Iron Rice Bowl” refers to b. a job within a Chinese State Owned Enterprise. 26. As a result of Privatization in Russia, by 1996 b. more than 75% of all large and midsize industrial firms had been privatized. 27. 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. 28. _____________ was the term used for “Privatization” in India, whereby the government sold off some of its shares in government owned enterprises (starting when P.V. Narasimha Rao was Prime Minister). c. Disinvestment 29. The “Household Responsibility System” d. More than one of the above answers is correct. 30. Lech Wałęsa a. was the first freely elected President of Poland. 31. The World Trade Organization c. was created on 1/1/1995, as a successor to GATT. 32. ______________ was the first Prime Minister of India, following their independence from Great Britain. b. Pandit Nehru 33. The Hindustan Fertilizer Company b. employed roughly 1,200 on a daily basis from 1979 to 1991, but did not produce any output during this time.34. The tremendous economic development which has occurred in Dubai during the last couple of decades has resulted from d. More than one of the above answers is correct. 35. A general criticism of “Special Economic Zones” is that a. an SEZ might not actually generate any new economic activity, but rather might simply move existing economic activity from one area to another in a potentially inefficient manner. 36. The “Ambassador” automobile was b. produced by Hindustan Motors in India for roughly five decades without any major changes to its basic design. 37. One of the distinguishing characteristics of economic reform in China was that the leaders in China often implemented “partial reform,” which refers to c. 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. 38. ____________ “lifted 300 million people out of
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