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Chapter 2
Managing the Global Economy since World War II: The
Institutional Framework
Multiple-Choice
1) States in the mercantilist period
a) increased their technology exports.
b) emphasized industrialization as a means of gaining wealth.
c) helped establish territorial unification and state authority.
d) viewed free trade as serving their interests.
2) The 1944 Bretton Woods Conference resulted in the formation of the
a) UNCTAD.
b) OECD.
c) GATT.
d) IBRD.
3) An example of a weighted voting institution is the
a) UNCTAD.
b) IMF.
c) WTO.
d) OECD.
4) Britain shifted to free trade policies in the 1830s-40s to
a) promote industrialization on the European continent.
b) increase its agricultural exports.
c) strengthen the Cobden-Chevalier Treaty with France. .
d) increase its industrial exports.
5) World Bank presidents have been
a) only Americans
b) only Americans and Europeans
c) only Europeans
d) Americans, Asians, and Europeans
6) GATT
a) became the main global trade organization after the ITO had
functioned for only a few years.
b) was comparable to the IMF and World Bank.
c) was originally designed to be temporary.
d) was formed at Bretton Woods.
7) Hegemonic stability theorists argue that in the interwar period
a) the United States was not yet willing to be the global hegemon.
b) the United States was beginning to act as the global hegemon.
d) the United States was not yet able to be the global hegemon.
8) Which of the following has been the most informal?
a) GATT
b) OECD
c) UNCTAD
d) IMF
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9) The human development index is sometimes used today to measure
development because it
a) is a better predictor of the future than the per capita GDP.
b) includes a measure of life expectancy.
c) includes the purchasing power parity.
d) includes a measure of political as well as economic well-being.
10) The G7/G8 has performed well in
a) negotiating agreements.
b) regulating international capital flows.
c) dealing with the issue of debt relief for LDCs.
d) enforcing decisions.
11) A country that was not a founding member of the IMF and World Bank
was
a) Yugoslavia
b) Czechoslovakia
c) Poland
d) Hungary
12) Judging by their actions, most civil society organizations are
a) reformist.
b) transformist.
c) conformist.
d) rejectionist.
13) The main informal group dealing with global economic issues is the
a) G77.
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b) G8.
c) G20.
d) G7.
14) The functions of the World Bank evolved in response to
a) the creation of the European Recovery Program.
b) the competitive devaluation of currencies.
c) the increase in protectionism.
d) the shift to floating exchange rates.
15) The G20 has become more important today primarily because
a) the breakup of the Soviet bloc has expanded the reach of the
capitalist global economy.
b) the emerging economies now have more influence.
c) globalization has spread to more countries.
d) democratization has become a more important force in the world.
True-False
1) Britain was the largest industrial power until the end of World War I
when the United States took over that position.
2) The United States, Japan, Germany, Britain, and France (the G5) are the 5
countries with the most votes in the World Bank today.
3) The GATT was not formed at the Bretton Woods Conference
4) The KIEOs (the IMF, World Bank, and WTO) are all specialized agencies
of the United Nations.
5) Purchasing power parity (PPP) based exchange rates do not take account
of income inequalities.
6) The G77 has become more important than the G7/G8 in dealing with
problems affecting the global economy.
7) All Directors-General of the WTO have been from developed countries.
Fill in the Blank
1) In 1930 the U.S. Congress passed the , which increased
U.S. tariffs to their highest level in the twentieth century.
2) In 1846 Britain repealed its , which opened its market to
agricultural imports and ushered in a period of free trade.
3) In 1860 Britain and France signed the , which produced
a network of trade agreements lowering tariffs throughout Europe.
4) In 1964 LDCs expressed their dissatisfaction with the KIEOs by forming
the .
5) In 1934 the U.S. Congress passed the , which delegated
tariff-setting authority to the President.
6) The first international financial organization, the , was
established in Basle, Switzerland in 1930.
7) The______________________________is an international economic
organization of 34 mainly DC members that usually operates through a
system of mutual persuasion.
Essay
1) What are the KIEOs? What problems have they confronted, and how have
they adapted and changed over time?
2) Describe OPEC, the NIEs, and the BRIC economies, and discuss how
they present a challenge to the dominance of the North.
3) What is the human development index (HDI) and what are its strengths
and shortcomings? What is the IHDI?
4) In what ways were the IMF, World Bank, and GATT designed to prevent
the economic problems that resulted in the Great Depression and World War
II?
5) Who are the members of the G7/G8, and in what ways is it an informal
grouping? Why do you think it was not established as a more formal
organization? Is Russia an active member of the group?
6) What functions does the OECD perform, how does it operate, and how
has its membership changed over time?
7) What are the advantages of using PPP-adjusted GDP figures, and what are
its shortcomings? What is the Gini coefficient?
8) What is the World Economic Forum? How does it contribute to a blurring
9) What are civil society groups, how do they differ in their goals and
tactics, and which type of civil society group is the most common?
10) What is the resource curse, and does it apply to all countries that are rich
in natural resources?