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The International Economy: A Global Road Map
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1

Economic nationalists rely on all of the following strategies to preserve and expand state power [except]
A)economic disincentives.
B)imperialism.
C)free trade.
D)protectionism.
2

Why are economic nationalists suspicious of economic interdependence?
A)They believe that it further perpetuates class conflict.
B)They believe that it inhibits free markets and international free economic exchange.
C)They believe that it undermines state sovereignty and weakens national economic strength.
D)they believe that it gives some countries a competitive advantage over others.
3

When Adam Smith argued in his book, "The Wealth of Nations" that politics should not interfere with trade he was advocating economic
A)nationalism.
B)structuralism.
C)internationalism.
D)mercantilism.
4

Economic liberals are considered modified capitalists because they believe that
A)capitalism should be radically reformed to reduce class-based divisions.
B)IGOs and national governments should be used in a limited sense to ensure fair competition.
C)politics should play a more pivotal role in economic policy.
D)pure free trade without political interference will increase global prosperity.
5

One criticism of using Gross National Product (GNP) as a basis to determine how well countries are doing is that the GNP
A)does not take into account prices for locally consumed goods despite the fact that the cost of locally consumed goods impacts purchasing power.
B)is a biased measure because it is based on the U.S. dollar.
C)is an outdated measure that does not take into account the move toward standardized currencies such as the euro.
D)relies too heavily on purchasing power to determine the economic health of countries.
6

The rapid increase in world trade over the past 100 years cannot be linked to which one of the following?
A)an increase in consumer demand for available goods
B)an increase in the general standard of living in most countries
C)an increase in the supply of goods available
D)an increase in the number of trade agreements promoting tariffs
7

The primary reason that the General Agreement on Tariffs and Trade was established was to
A)set trade tariffs between countries.
B)provide a means for countries to reduce international trade barriers.
C)coordinate trade throughout the world.
D)help LDCs to increase their trade.
8

Opponents of free trade argue that free trade is dangerous because it
A)increases state sovereignty.
B)encourages diversification instead of specialization which reduces the quality of manufactured goods.
C)reduces international conflict because countries become increasingly dependent on one another for resources.
D)threatens the domestic economy and reduces the workforce.
9

The majority of foreign investors invest in LDCs because this is where development capital is most desperately needed.
A)True
B)False
10

International exchange rates have little impact on domestic economies.
A)True
B)False





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