1. Which of the following factors contributed to the Great Economic Crisis that began in
2008?
c) excessive US banking regulation in the 1980s
d) the sovereign debt crisis in the Eurozone
2. Which Asian economy technically avoided a major recession during the global
economic crisis of 2008?
a) China
b) India
3. Which of the following is the formal, economic definition of a recession?
a) The inability of a country to pay back its debts
b) A period of reduced economic activity often marked by high unemployment and
inflation
4. What factor does the book say helped to mitigate, if not prevent, the effects of the
global crisis on a number of Middle Eastern nations?
a) having more natural gas and shale
b) having fewer economic ties to Iran
5. What is the meaningful unit of analysis in most contemporary definitions of
economics?
a) the multinational corporation seeking rents
d) irrational human beings
6. The textbook describes which three economic paradigms?
c) Liberal, conservative, and communist
d) None of these is correct.
7. Liberal economic theory states that
c) every nation should implement protectionist policies to ensure the well-being of its
people first and foremost and then allow for trade between nations.
d) None of these is correct.
8. Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations, published
in 1776, was the first book to articulate the theory of
a) political liberalism.
d) taxation without representation.
9. Liberal economic theorists assume that individual actors are “rational” in what sense?
a) Individuals know their best interests and how to get what they want.
b) Individuals have goals that make sense and will work to attain these goals in a rational
manner.
10. According to the law of supply and demand, which factor does NOT determine the
price of a good in the marketplace?
a) The supply of the item
d) The availability of money
11. Which of these are often considered synonymous?
a) Economic nationalism and Marxism
b) Socialism and protectionism
12. Which of the following statements is not true of the theory of economic nationalism?
a) Tariffs, subsidies, and import quotas have an important place in economic policy.
d) All of these are true about the theory of economic nationalism.
13. According to Karl Marx, the value of goods and services
a) is determined by supply and demand.
b) should be determined by the state.
14. Marx theorized that economic and political inequality were inescapable as long as
there was a working class and a capitalist class that
a) owned all the businesses.
d) owned government bonds.
15. What is the definition of the economic indicator known as the gross domestic product,
or GDP?
a) The total value of all the goods produced in a country in a year
b) The total value of all the services produced in a country in a year
16. What does development economics study?
c) How economic control metamorphoses into political control
d) All of these are correct.
17. Which author theorized that nations pass through five economic stages before
reaching the stage of high mass consumption, like that seen in the United States and
Western Europe?
a) Adam Smith
d) Margaret Thatcher
18. What did economist Arturo Escobar argue is the reason development projects
successful in the First World often fail when instituted in the Third World?
a) Lack of sufficient capital to sustain initial growth
b) Decades of labor exploitation leading Third World workers to embrace apathy instead
of ambition
19. What is the goal of neoliberalism?
a) To free the movements of goods and services between countries
b) To maximize economic profits and efficiency regardless of citizenship
20. What is/was the Washington Consensus?
a) an agreement about how to address the 2008 global economic crisis
d) a plan to increase tariffs on goods from Latin America
21. When was the World Trade Organization founded?
a) 1978
b) 1984
22. What is one reason given in the textbook to explain Western and non-Western
economic differences?
a) Western culture urges people to work hard to accumulate goods and services to
achieve happiness.
b) Many non-Western cultures urge members to minimize wants to achieve happiness.
23. What is the underlying issue concerning sustainability?
a) Industrial capitalism is the cause of economic deficiency.
b) Depletion of natural resources is only a few years away.
24. What do ecological economists attempt to do?
a) identify the best farming practices in Nigeria and the Swiss Alpine valleys
d) find new, untapped sources of petroleum