Philip Leatherwood, Lecturer

10 May, 2001

Student Name: ___________________________________

Student #: ______________________________

Score: ___________________

Part One: Multiple Choice. Circle the letter of the best answer.

1. The following recommendations were included in the "World Bank Development Report:"
1. Fair and predictable judicial system
2. Lower controls on foreign trade
3. Privatization to ensure competition
4. All of the above
5. None of the above

 

2. The feudal economic system?#060;/LI>
   1. discouraged market economics by condemning wealth
   2. discouraged market economics with demands of "just (fair) prices"
   3. discouraged market economics through the Christian paternalistic ethic
   4. All of the above
   5. None of the above

    

3. The use of public policy to encourage exports and discourage imports best describes?#060;/LI>
   1. Imperialism
   2. Capitalism
   3. Mercantilism
   4. All of the above
   5. None of the above

    

4. Adam Smith's prescription on the proper responsibilities of government included?#060;/LI>
   1. Protect citizens from high inflation
   2. Maintain reasonably low levels of taxes
   3. Maintain public institutions that might not profit individual investors
   4. All of the above
   5. None of the above

    

5. Adam Smith was one of the promoters of Individualism, together with?#060;/LI>
   1. Immanuel Kant
   2. Joseph Schumpeter
   3. Paulo Freire
   4. All of the above
   5. None of the above

    

6. Given that interest rates are raised in Kazakhstan, we would expect?#060;/LI>
   1. The value of the dollar would rise against the Tenge
   2. The demand for tenge would increase
   3. The supply of tenge would increase
   4. All of the above
   5. None of the above

    

7. Given that Kazakhstan wants to maintain the value of the tenge at less than 150 tenge to the dollar, if the exchange rate increased to 152, the central bank might?#060;/LI>
   1. Purchase tenge in international currency markets
   2. Purchase dollars in international currency markets
   3. Purchase securities through open market operations
   4. All of the above
   5. None of the above

    

8. The advantages of a lower exchange rate (lower currency value) include?#060;/LI>
   1. Less expensive Russian vodka
   2. Higher demand for exported goods
   3. Higher real wage rates
   4. All of the above
   5. None of the above

    

    

    

9. What group suffers the greatest cost of a tax on imported goods?
1. Domestic consumers
2. Foreign consumers
3. Foreign firms
4. Domestic firms
5. All groups suffer equally

 

10. "Withholding income from consumption" is a suggestion about how to?#060;/LI>
    1. encourage economic growth
    2. shift spending to investment
    3. encourage capital production
    4. All of the above
    5. None of the above

     

11. Plans to implement new market economies in Eastern Europe typically included?#060;/LI>
    1. Currency convertibility
    2. Privatization of state firms
    3. Trade liberalization
    4. All of the above
    5. None of the above

     

12. The problems of trying to implement a new market economy have typically included?#060;/LI>
    1. Over-emphasis on reducing import tariffs
    2. Lack of protection for industries with outdated technology
    3. Deflation
    4. All of the above
    5. None of the above

     

     

     

     

13. The Shatalin Plan is best described as?#060;/LI>
    1. The plan to privatize Poland's industry in a "big bang"
    2. The movement toward full and free exchange of currencies throughout the former USSR
    3. Perestroika with a deadline
    4. All of the above
    5. None of the above

     

14. "Creative Destruction" refers best to the?#060;/LI>
    1. privatization of state industry
    2. independence of the Soviet republics
    3. Marx's argument on the ultimate trends of a pure capitalism
    4. All of the above
    5. None of the above

     

15. Since 1950, China has generally enjoyed better economic growth than India, mostly because?#060;/LI>
    1. China's economy is more capitalistic
    2. China's has fewer restrictions on foreign trade
    3. China has a larger population
    4. All of the above
    5. None of the above

     

16. Incomes will be more equally distributed with?#060;/LI>
    1. A smaller Gini Coefficient
    2. A regressive tax system
    3. Improvements in financial infrastructure
    4. All of the above
    5. None of the above

     

     

     

     

17. The "Veil of Ignorance" is an idea attributed to--
1. Barry Commoner
2. Vilfredo Pareto
3. Paulo Freire
4. John Rawls
5. None of the above

 

18. A trade agreement that includes the free movement of labor is called?#060;/LI>
    1. Customs Union
    2. Common Market
    3. Free Trade Area
    4. Free Market Union
    5. None of the above

     

19. Karl Marx argued that in a true capitalism
1. The value of labor input determines the value of a good or service
2. Capitalist production allows for "surplus value," which flows to the owners of industry
3. Repetitive business cycles lead to monopolization of production
4. All of the above
5. None of the above

 

20. Movements in supply and demand of currencies will tend to equalize the price of goods in different countries—this idea is called?#060;/LI>
    1. Comparative Advantage
    2. Imperialistic Trade-Price Theory
    3. Purchasing Power Parity
    4. All of the above
    5. None of the above

Part Two. Short Answer. Briefly define the following terms:

1. Christian Paternalism-- ________________________________________________________________________

2. Bretton-Woods System-- _______________________________________________________________________

3. Say's Law-- _________________________________________________________________________________

4. Mercantilism-- ______________________________________________________________________________

5. Imperialism--_______________________________________________________________________________

6. Fiscal Policy-- _______________________________________________________________________________

7. Comparative Advantage-- ______________________________________________________________________

8. Pareto Optimality-- ___________________________________________________________________________

9. Tragedy of the Commons-- _____________________________________________________________________

10. Customs Union-- ____________________________________________________________________________

1. Calvin Hoover-- _____________________________________________________________________________

2. Paulo Freire-- _______________________________________________________________________________

3. David Ricardo-- _____________________________________________________________________________

4. Karl Marx--_________________________________________________________________________________

5. J. S. Mill-- _________________________________________________________________________________

6. Milton Friedman-- ____________________________________________________________________________

7. Barry Commoner-- ___________________________________________________________________________

8. The International Monetary Fund-- _______________________________________________________________

9. Adam Smith-- _______________________________________________________________________________

10. Gorbachev-- _______________________________________________________________________________