ECON 1100 – Global Economics (Section 03)
Exam #4 – Spring 2012 (Version A)
Multiple Choice Questions ( 2 12 points each):
1.
____________ was President of Russia when the Gaidar Reforms were instituted
in 1992, moving the country to a market economy by way of “shock therapy.”
A.
Yegor Gaidar
B.
Leszek Balcerowicz
C.
Mikhail Gorbachev
D.
Boris Yeltsin
2.
As part of his “New Economic Policy” Richard Nixon
A.
implemented price controls in an unsuccessful attempt to curb inflation.
B.
established a series of programs which were called the “New Deal.”
C.
forced farmers to drown their chickens instead of sending them to market.
D.
completely eliminated the U.S. Federal Income Tax (a change which was
undone with the reimplementation of the tax by President Carter in 1977).
3.
The “Cultural Revolution” refers to the
A.
mass emigration from China which occurred from the late 19th century
through the middle of the 20th century.
B.
economic movement launched by Mao Zedong in the late 1950’s to
“harness the ideological fervor of the Chinese population” to the task of
raising economic output.
C.
social movement launched by Mao Zedong in the 1960’s to rid China of
“liberal bourgeoisie elements” and continue “revolutionary class struggle.”
D.
None of the above answers are correct.
4.
Which of the following contributed to the U.S. entering the Great Depression?
A.
The assassination of President Roosevelt on 3/4/1933.
B.
The contractionary monetary policy enacted by the Federal Reserve
between August 1929 and March 1933, during which time the money
supply in the United States was decreased by one-third.
C.
The poor performance of the U.S. stock market throughout the 1920s
(starting with the stock market crash of 1922, when the DJIA decreased in
value by 52.4% during the first week of September 1922).
D.
More than one (perhaps all) of the above answers is correct.
5.
The system of Indicative Planning implemented in ________________ following
World War II became known as “Planification.”
A.
Great Britain
B.
France
C.
Russia
D.
Germany
6.
_________________ was Prime Minister of Great Britain when the country
Nationalized the Commanding Heights of its economy after World War II.
A.
Margaret Thatcher
B.
Keith Joseph
C.
Clement Atlee
D.
Winston Churchill
7.
The Misery Index in the United States achieved its lowest value of the 20th
century during the time when ____________________ was President.
A.
Calvin Coolidge
B.
Franklin D. Roosevelt
C.
Ronald Reagan
D.
Barack Obama
8.
Focusing on China’s role in the global economy, as of 2009 China
A.
exported roughly $986.5 billion worth of goods (the 2nd most of all
countries in the World) but imported only about $17.5 billion worth of
goods (the 54th most of all countries in the world)
B.
imported roughly $1.345 trillion worth of goods (the most of all countries
in the World) but exported only about $56.3 billion worth of goods (the
61st most of all countries in the world).
C.
exported roughly $1.204 trillion worth of goods (the most of all countries
in the World) and imported roughly $954.3 billion worth of goods (the 3rd
most of all countries in the World).
D.
exported roughly $124.2 billion worth of goods (the 76th most of all
countries in the world) and imported roughly $154.3 billion worth of
goods (the 81st most of all countries in the World).
9.
In the “Commanding Heights” textbook, it is noted that by instituting the
economic reforms which led to dramatic increases in Chinese living standards
from 1978 onward, __________________ “did something that no one else in
history has ever accomplished – he lifted 300 million people out of poverty in just
two decades.”
A.
Xiao Huang
B.
Deng Xiaoping
C.
Mao Zedong
D.
Hu Jintao
10.
Which of the following was a part of the “Gaidar Reforms” introduced in Russia?
A.
The establishment of “Social Safety Net” programs, including
unemployment compensation.
B.
A massive program of Nationalization, giving the Russian government
ownership of the Commanding Heights of the economy for the first time.
C.
The creation of Gosten, a government agency responsible for setting
prices in all markets.
D.
More than one (perhaps all) of the above answers is correct.
11.
The regulation of business by the Federal Government in the United States began
with the creation of the
A.
Interstate Commerce Commission in 1887.
B.
Department of Commerce in 1903.
C.
Securities and Exchange Commission in 1934.
D.
Department of Health and Human Services in 1953.
Answer Questions 12 through 14 based upon the information conveyed in the graph
below. This graph illustrates Demand and Supply for “good X” in March 2012. The
current (free market) price is $7.40, at which 24,500 units are traded.
Supply
price
8.50
(a)
(b)
(c)
(d)
7.40
(e)
Demand
6.25
0
quantity
0
12,200
24,500
32,800
51,900
12.
Suppose the government imposes a price ceiling of $6.25 in this market. As a
result of this policy, Total Consumers’ Surplus would
A.
increase by “Areas (c)+(d)+(e).”
B.
increase by “Area (c).”
C.
change by “Areas (a)–(d)” (which could be either an increase or decrease).
D.
change by “Areas (c)–(b)” (which could be either an increase or decrease).
13.
If a price floor of $7.95 were imposed in this market, then __________ units
would be traded.
A.
exactly 24,500.
B.
more than 12,200 but fewer than 24,500.
C.
exactly 12,200.
D.
fewer than 12,200.
14.
Consider the following two proposals: “Policy A” is a price floor of $8.50 and
“Policy B” is a price ceiling of $7.00. We can infer that
A.
the magnitude of Deadweight-Loss would be exactly the same under either
“Policy A” or “Policy B.”
B.
“Policy A” would create a larger Deadweight-Loss than would “Policy B.”
C.
“Policy B” would create a larger Deadweight-Loss than would “Policy A.”
D.
None of the above answers are correct, since the graph does not convey
enough information to be able to compare the magnitude of DeadweightLoss under these two alternative policies.
15.
________________________ can be thought of as a “reversal (or undoing) of
Nationalization.”
A.
The Household Responsibility System
B.
Perestroika
C.
The Economic Calculation Problem
D.
Privatization
16.
General Electric makes turbines that produce electricity. Anheuser-Busch makes
Budweiser beer. Which of these two enterprises are part of the Commanding
Heights?
A.
Both General Electric and Anheuser-Busch.
B.
General Electric, but not Anheuser-Busch.
C.
Anheuser-Busch, but not General Electric.
D.
Neither General Electric nor Anheuser-Busch.
17.
During the Great Depression, Jacob Maged of Jersey City, NJ was fined $100 and
spent 3 months in jail for
A.
instituting economic reform by way of “shock therapy” in New Jersey.
B.
tricking naïve investors into making stock purchases “on margin.”
C.
stealing food from a soup kitchen.
D.
charging 5¢ less than the NRA code price for cleaning a suit.
18.
The “General Commission of Planning” that was established by the French
government in 1946 was initially headed by
A.
Johannes Semler
B.
Friedrich von Hayek
C.
Jean Monnet
D.
Charles de Gaulle
19.
The “Winter of Discontent” refers to the
A.
crash of the London Stock Exchange on 2/3/1922, after which Great
Britain entered a recession which would last until 1931.
B.
large scale labor strife which occurred throughout many sectors of the
British economy in 1978-1979.
C.
hyperinflation which occurred in Great Britain in January 1984,
eliminating the life-savings of many middle class Britons.
D.
wedding between William Arthur Philip Louis Mountbatten-Windsor
(a.k.a. Prince William) and Catherine Elizabeth “Kate” Middleton on
April 29, 2011.
20.
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.
A.
Tibet
B.
the “Pearl River Delta” region of Guangdong Province
C.
the autonomous region of Inner Mongolia
D.
the highly productive agricultural regions of Sichuan Province
21.
After Jeffrey Sachs agreed to formulate a plan for economic reform in Poland,
Polish leaders told him that
A.
it did not really matter how long it took him to write up his plan, since
asking him to do so was only symbolic and there was no chance that his
plan would ever actually be implemented.
B.
they needed the plan immediately, which forced him to write up his plan
that night and deliver it to members of Parliament the following morning.
C.
he could take two weeks to write the plan, since Parliament would be on
recess over Christmas and the New Year holiday.
D.
he could take up to 5 years to write the plan if needed, since there had just
been a national election and the current leaders were certain to be in office
for at least this amount of time.
22.
It has been estimated that NRA Codes typically ___________ the cost of doing
business by approximately ____.
A.
decreased; 10%.
B.
increased; 5%.
C.
increased; 15%.
D.
increased; 40%.
23.
The “Treaty of Rome”
A.
was initially signed in 1947 by 23 countries, geographically from all
reaches of the globe.
B.
established a “common market” in Europe and was the precursor to the
European Union.
C.
was the primary cause of the Great Depression.
D.
nationalized the Commanding Heights of the German economy.
24.
______________ became known as the “Mad Monk” because of the impassioned
political speeches which he gave throughout Britain in the mid 1970’s extolling
the virtues of free enterprise and market based economic systems.
A.
Graham Norton
B.
Clement Atlee
C.
Milton Friedman
D.
Keith Joseph
25.
Ludwig Erhard (who became the German Director of Economic Administration in
the American/British Occupation Zones in 1948) belonged to a group of
economists called the “Ordoliberals,” who wanted to
A.
establish an economic system which relied on “Command Planning,”
similar to the system that was in place in the Soviet Union.
B.
establish an economic system which relied primarily upon free markets,
but with a significant “social safety net.”
C.
establish an economic system which relied entirely upon free markets,
with no government intervention whatsoever.
D.
make Germany a colony of Great Britain.
26.
The current population of China is approximately
A.
152,702,097, which is just less than half of that of the United States.
B.
306,117,704, which is roughly equal to that of the United States.
C.
1,330,044,605, which is roughly 20% of the world’s population.
D.
3,118,543,024, which is roughly 50% of the world’s population.
27.
In most industrialized countries, the role of government in the economy
____________ during the first part of the twentieth century and ______________
during the last part of the twentieth century.
A.
increased; then decreased.
B.
decreased; then increased.
C.
increased; then increased further.
D.
decreased; then decreased further.
28.
After tax rates were decreased throughout the 1920’s, total revenues from the U.S.
Federal Income Tax
A.
decreased from $850 million in 1921 to less than $100 million in 1928.
B.
decreased from $10.2 billion in 1921 to less than $5.6 billion in 1928.
C.
remained relatively constant at roughly $2.2 billion between 1921 and
1928.
D.
increased from $700 million in 1921 to over $1 billion in 1928.
29.
_______________ 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.
Shu-How Lin
D.
Junichirō Koizumi
30.
At the end of the Cold War,
A.
both the Soviet Union and the U.S. were devoting roughly 2% of GDP to
national defense.
B.
both the Soviet Union and the U.S. were devoting roughly 25% of GDP to
national defense.
C.
the Soviet Union was devoting over 30% of GDP to national defense,
while the U.S. was devoting about 6% of GDP to national defense.
D.
the Soviet Union was devoting about 4% of GDP to national defense,
while the U.S. was devoting over 40% of GDP to national defense.
31.
________________________ 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 Great Society
B.
The New Deal
C.
The Square Deal
D.
Johnsonomics
32.
Which of the following was a key part of the policies which FDR put in place to
deal with the Great Depression?
A.
The temporary elimination of the U.S. Federal Income Tax, which would
increase the disposable income of households (giving people more money
to spend in the short term).
B.
The creation of the “National Recovery Administration,” which in many
respects was an attempt at Indicative Planning.
C.
The creation of Special Economic Zones in urban areas of the Great Lakes
region, in an attempt to attract foreign direct investment to cities such as
Chicago, Detroit, Toledo, Cleveland, and Buffalo (which, at this time,
were heavily dependent upon declining industries).
D.
More than one (perhaps all) of the above answers is correct.
33.
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” (the gradual economic reforms begun in
April 1987).
B.
the program of “Voucher Privatization.”
C.
the “Loans for Shares Deals.”
D.
“Small Scale Privatization.”
34.
In 2009 the Unemployment Rate in the U.S. was 9.26% (recall, this was only the
third year since the end of WW-II that the rate was above 9%). In comparison,
during the Great Depression the Unemployment Rate was
A.
never above 9% in any single year.
B.
between 9% and 12% in each of the four years from 1930 through 1933,
but then below 7% from 1934 onward.
C.
above 9% for 11 consecutive years (from 1931 through 1941).
D.
None of the above answers are correct.
35.
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 system of Indicative Planning that evolved in France after
WW-II.
36.
Which of the following was NOT a characteristic of Chinese economic reform?
A.
“Partial Reform.”
B.
“Decentralization.”
C.
“Shock Therapy.”
D.
“Economic Liberalization without Political Democratization.”
37.
Several enterprises in Great Britain (such as North Sea Oil and Gas) were
privatized with a “Golden Share,” which meant that
A.
after the time of privatization the profits of the enterprise would be shared
equally among all members of society.
B.
after the time of privatization the enterprise would be legally required to
keep gold physically on hand in a vault, in an amount equal to the annual
salary of all employees (to guarantee that they had enough assets to honor
employment contracts).
C.
there was a special ownership share (either retained by the government or
sold to a pre-screened buyer) which allowed the government to prevent
control of the enterprise from falling into “unsuitable hands.”
D.
after the time of privatization it would be illegal for workers in the
industry to form a union, thereby eliminating problems related to pay
determination (which typically arise following privatization).
38.
Which of the following was one of the primary policy elements which became
known as “Thatcherism”?
A.
An expansion of the size and scope of the welfare state.
B.
A rejection of Monetarism in favor of Keynesianism.
C.
Decreasing levels of taxation and making the tax system less progressive.
D.
More than one (perhaps all) of the above answers is correct.
39.
In the 1972 U.S. Presidential Election, Richard Nixon
A.
narrowly defeated George McGovern, by 49.2% to 48.8% in the popular
vote and 270 to 268 in the Electoral College vote.
B.
defeated George McGovern in a landslide, by 60.7% to 37.5% in the
popular vote and 520 to 17 in the Electoral College vote.
C.
defeated Jimmy Carter in a landslide, by 59.4% to 38.3% in the popular
vote and 499 to 39 in the Electoral College vote.
D.
was narrowly defeated by Jimmy Carter, by 45.6% to 44.9% in the
popular vote and 273 to 252 in the Electoral College vote.
40.
A general criticism of “Special Economic Zones” is that
A.
the establishment of a SEZ allows the government to create a “laboratory”
in which new policies can be “tested” on a small scale before potentially
being generalized to the entire economy.
B.
the creation of a SEZ can potentially allow society to realize “economies
of agglomeration.”
C.
a SEZ may not actually generate new economic activity, but rather might
simply move existing economic activity from one area to another in an
inefficient manner.
D.
More than one (perhaps all) of the above answers is correct.
(Blank Page)