Republic of the Philippines
PHILIPPINE STATE COLLEGE OF AERONAUTICS
INSTITUTE OF LIBERAL ARTS AND SCIENCES
Piccio Garden, Villamor, Pasay City
Preliminary Examination
Second Semester – SY 2020 - 2021
CONTEMPORARY WORLD
Name: ___________________________________
Year and Section: __________________________
Date: __________________
General Directions: You have two(2) hours to complete the exam. You may allocate your time as you wish. I recommend
that you spend some time organizing your thoughts before you begin to write and that you reserve some time to go over your
responses after you have completed the exam. Write your answers on a seperate Docs or paper.
I. Multiple Choice.
Instruction: Select the response that best answers the question or statement.
1. The ability to connect with and learn about people from across the globe through the internet and increased travel
opportunities provides what benefit to society?
A. Flexible labor markets
B. Cheaper goods and services
C. More trade
D. Increased cultural understanding
2. Which of these organisations strains on the liberalization of foreign investment and foreign trade?
A. International Monetary Fund
B. World Health Organisation
C. World Trade Organisation
D. International Labour Organisation
3. Liberals believe protectionism:
A. hurts the country which adopts a protectionist policy against others
B. hurts the countries that are the object of the protectionist policies
C. hurts both the country that adopts protectionism and its trading partners
D. none of the above
4. Tariffs may accomplish the goals of protectionism by
A. placing a numerical limit on the number of imported goods
B. providing direct payments to domestic producers
C. negotiating a voluntary export restriction with a country’s trading partner
D. imposing taxes on foreign imports
5. Which two of the following are the most likely effects of the imposition of a tariff on an imported good?
I. The domestic price of the imported good will fall
II. Overseas production of the good may be stimulated
III. Overseas employment will rise
IV. The domestic price of the imported good will rise
V. Gain of tax revenue by the government
A. I & IV
B. I & III
C. II & V
D. IV & V
6. Which statement is correct for nominal GDP?
I. Nominal GDP is calculated based on current prices.
II. Nominal GDP is calculated based on the base (previous year) prices.
III. Data on Nominal GDP shows an accurate picture of the economy as compared to real GDP.
A. II & III
B. only II
C. only I
D. I & III
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7. Which of the following would be counted as investment when calculating gross domestic product?
A. The purchase of a used computer by an auto manufacturer
B. The purchase of a share of stock by an employee
C. The construction of a new house
D. The profit earned when selling shares of stock
8. The major difference between real and nominal gross domestic product (GDP) is that real GDP
A. Excludes government transfer payments
B. Excludes imports
C. Is adjusted for price-level changes using a price index
D. Measures only the value of final goods and services that are consumed
Note: for question #6, to earn an extra point (1), you have a chance to justify your answer.
9. The sale of homes built in the past, stocks and bonds, and machinery built in the past is:
A. counted in this year's GDP.
B. excluded from this year's GDP.
C. counted in the previous years that they are sold.
D. None of the above
10. In 2008, Lexter bought a used Mitsubishi from her local automobile dealer. The Mitsubishi was originally produced in the
year 2000 and sold for P1 Million to the first owner who bought the car in 2000. The used car dealer bought the car in 2008
for P150,000 from the original owner. Then, the dealer washed and waxed the car right before selling it to Lexter. Which
of the following is counted towards GDP in 2008?
A. The total price paid by Lisa for the car.
B. The original market price of the car.
C. The amount the dealer paid the previous owner for the car.
D. The value of the wash and wax right before selling the car.
11. The De La Salle University - Manila, a privately owned school, is currently building a new hospital. This will be
classified in Philippine GDP as ________, because ____________.
A. investment; it increases the capital stock
B. consumption; it will provide medical services to consumers
C. government purchases; the construction constitutes government expenditure
D. net exports; most construction workers are foreigners
12. You have been asked to measure Gross Domestic Product. You are informed that the sum of consumption, domestic
investment, government purchases, and exports is $24 trillion. You then learn that imports are $2 trillion.
To get GDP, you should
A. add $2 trillion to $24 trillion because imports are purchased by consumers, firms, and the government.
B. add $2 trillion to $24 trillion because imports are used as inputs in the production of other goods.
C. subtract $2 trillion from $24 trillion because imports are purchased by consumers, firms, and the government.
D. subtract $2 trillion from $24 trillion because imports cost domestic jobs.
13. Globalization often promotes competition. This is a benefit because _____
A. The quality of products and services usually increases and the prices tend to increase.
B. The local firms make bigger profits and product prices tend to increase.
C. The quality of products and services usually increases and they become more affordable.
D. The local firms make bigger profits and products become more affordable.
14. The United Nations came into being in 1945, following the devastation of the Second World War, with one central mission:
the maintenance of international peace and security. The UN does this by working to prevent conflict; helping parties in
conflict make peace; peacekeeping; and creating the conditions to allow peace to hold and flourish. What aspect of
globalization deals with the establishment of UN in order to maintain international peace and security?
A. Sociological
B. Political
C. Cultural
D. Economic
15. Which of the following statements best describes our understanding of the term 'globalization'?
A. Globalization refers to the process by which shared hegemonic values pervade societies across the globe, drawing them
into an ideological community, most often based on the economic principles of capitalism.
B. Best described as intensification of worldwide social relations and increasing interdependence, globalization is the result
of the compression of space and time through the development of new technologies.
C. Globalization is best described as the 'shrinking' of the global community, drawing people into closer contact with one
another primarily at the economic and technical levels. This process began in the early 20th century and was based on the
ideological expeditions that originated from western Europe.
D. Globalization has occurred since the 1980s, originating in Western Europe as a centre of political power and
technological advancement. The process is a direct result of technological advancement in communications and travel
industries that facilitate the efficient transportation of physical objects, people and ideas across the globe.
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16. In the context of globalization, how can we best define the term 'development'?
A. The term development refers to the human condition in which there is freedom from fear and want; there are sufficient
resources to sustain life and this life can exist in a state free from the threat, or perceived threat, of sudden interruption.
B. To be considered as developed, a nation must have achieved certain economic and political status within the global state
system; the criterion for what constitutes a 'developed' state is thus defined by those requirements of interaction in this
system.
C. Development is a means to address the inequalities that accompany neoliberal globalization. In this context, development
refers to the ability of a population or community to effectively utilize resources and increase efficiency in production
and distribution, promoting the more equitable distribution of income within society.
D. Development of a community refers to the ideological and ethical value systems to which its population subscribes. In
the globalised international system this refers to the adoption of western liberal democratic ideology and free market
economics.
17. Which of the following is not a purportedly beneficial outcome of the globalization process?
A. The redistribution of wealth, addressing disparities in economic and resource allocation across the globe through a sense
of greater 'interconnectedness'.
B. The growing sense of global community, resulting in super-national identities that result from populations feeling closer
to one another.
C. The sharing of ideas, technologies and resources that can directly benefit human security, such as medical advancements.
D. A global market that has demonstrated the ability, if left unchecked, to reduce poverty and make substantial economic
gains.
18. How have the World Bank and International Monetary Fund, as international financial institutions (IFIs), affected the
development of poorer countries?
A. Financial policies advocated by the World Bank and IMF were readily adopted by developing countries that sought to
bring their economic development into line with wealthier nations. The IFIs focus has been on achieving human security
and the promotion of development at a societal level.
B. Through the implementation of specific financial policies adopted at the bequest of global financial institutions, many
developing countries have gained economic prosperity and the correlating levels of human security.
C. The World Bank and IMF tend to operate in an economic arena that includes only major financial institutions and
wealthy states; coupled with a respect for sovereignty, the scope of such institutions does not reach to interference in
national politics.
D. IFIs identified the economic failings of developing countries as being the result of political problems. Thus, IFIs adopted
an approach that involved political and economic restructuring of these states, coercing governments into the adoption of
specific financial policies designed to promote debt repayment and economic development.
19. How might global inequality present a threat to global security?
A. Human security is threatened by global inequality, because 3s of the world population do not share the benefits of
globalisation. However, this inequality does not translate into political instability or involve military action.
B. Global inequality creates disenfranchised populations who, although discontent with their situation, lack the agency to
rebel or protest.
C. Revolutionary uprisings are likely to occur; people of the world who have been left behind by neoliberal globalisation
can become radicalised and rebel against those who have benefitted from the economic policies that have failed them.
D. Global inequality does not present a significant threat to global security.
20. To put it basically, the aims of privatization, deregulation and liberalization are the following except:
A. Relieve financial burden from the government in the operation of utilities, ventures and services, saving the government
money
B. Ensure conduciveness for free competition and private investment towards profitable ventures;
C. Ensure the smooth flow of goods, products, and services across borders.
D. It undermines the domestic economy by flooding the local market with cheaper, mass produced goods from the advanced
countries to the detriment of the domestic producers.
II Discussion/ Essay.
Instruction: In this section, you will take on some issues on Globalization. Write out the questions you are responding to
before your answers. Answers should NOT include any significant amount of material already presented in ANY assessed
essays. (No minimum sentences are required)
Economic Globalization
1. Discuss the three key dimensions of neoliberal economic dimensions of globalization. What are they and what is one
example of each of them? Do these measures appeal to you? Why or why not? (10 pts)
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2. Multinational companies contributed to the process of globalisation in the twentieth century. How would you react if a
multinational employing several hundred people announced they were moving to your country because production costs were
lower? (10pts)
Political Globalization
1. The UNITED NATIONS has sent peace-keeping troops to nations in which they are not allowed to use force. This is an
example of both the power and the weakness of the United Nations. In what ways is the United Nations a useful organization
to resolve the territorial dispute issues in the West Philippine Sea. (10 pts)
Prepared by:
John Lexter C. Rosales
Instructor, Social Science Department
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