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Question 1

Having a euro-centric view of the world implies:

a) Believing that within Europe the euro should be the common currency

b) Being suspicious of the power of the European Parliament over national governments

c) Seeing the experience of European countries as being the model that other countries in the world should adopt

d) Believing that more powers should be centred in the institutions of the European Union

Question 2

What is meant by the term "glocalization"?

a) That local actions can affect or are affected by the global environment

b) That it is better to encourage people to shop locally

c) That civilization has is now under threat because of globalization

d) That colonization may have ended in the form of political control but that the power of global corporations means many countries are still not independent

Question 3

Assume that there are 2 countries A and B and that they can both produce 2 goods X and Y. The Theory of Comparative advantage predicts that:

a) Trade can only take place if country A has an absolute advantage in producing one of the goods and country B has an absolute advantage in producing the other

b) Trade can take place even if country A has an absolute advantage in both providing that B chooses to specialize in the good in which if has the least comparative disadvantage and A specializes in the one in which it has the greater comparative advantage

c) Trade between A and B will only take place if both countries are at a comparatively similar stage in the development of their economies

d) None of the above

Question 4

The term "late industrialization" refers to:

a) The need to delay industrialization because of its threats to the environment

b) The problems faced by many developing countries as they seek to catch up to the levels of development of richer countries

c) The belief that it is too late for many countries to industrialize

d) That we are now entering a post-industrial world

Question 5

Which of the perspectives outlined in the chapter would be the most closely associated with the "Washington Consensus"?

a) Neo-classical Perspective

b) Structuralist Perspective

c) Radical Perspective

d) Dependency Perspective

Question 6

Which of the following policies would not have been supported by people who would have regarded themselves as part of the "Washington Consensus" tradition?

a) Trade liberalisation

b) Openness to foreign direct investment

c) Fiscal discipline

d) Gradual reduction of controls investment

Question 7

What are the implications of the Prebisch-Singer Hypothesis?

a) Developing countries should seek to export raw materials and labour intensive goods

b) That because the price elasticity of demand for primary goods is relatively inelastic it is pointless for developing countries to seek to export these

c) That because the income elasticity of demand for primary goods is inelastic over time there will be a decline in primary commodity prices and therefore the incomes derived from primary goods

d) Trade will always be mutually beneficial between a developed and a developing country as long as they both seek to exploit their comparative advantages

Question 8

Which of the following international organisations is now responsible for developing and maintaining the system of international trade rules and dealing with trade disputes?

a) The IMF

b) The World Bank

c) The U.N.

d) The W.T.O

Question 9

Which of the following economists is regarded as having developed the theory of comparative advantage?

a) Adam Smith

b) David Ricardo

c) Joseph Stiglitz

d) Amartya Sen

Question 10

What is meant by the term "asymmetric information"?

a) Information that cannot be measured

b) Information that is not yet available

c) Information that is freely accessible to all people

d) Where information is not equally shared and the consequence of this is that one party might lose out but it does not have the full access to the information that another party has

Oxford University Press, Online Resource Centre, Chapter 12.

Chapter 12

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