Economic Development vs. Economic Growth Quiz

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Questions and Answers

What distinguishes economic development from economic growth?

Economic development focuses solely on GDP increase.

Economic growth prioritizes environmental sustainability.

Economic growth is measured solely by job opportunities.

Economic development is concerned with social well-being and policy intervention. (correct)

Which of the following measures would be best to assess human well-being in a nation?

Unemployment rate.

Balance of trade.

Human Development Index (HDI). (correct)

GDP growth rate.

How does underdevelopment affect nations?

It leads to higher levels of education and job opportunities.

It enhances the balance of trade.

It ensures equal access to health care and potable water.

It creates a disparity between rich and poor populations. (correct)

What does globalization contribute to in contemporary society?

Increasing inequalities between countries and societies. Signup and view all the answers

Which statement best describes the future flow dynamics according to recent observations?

China is expected to shape future flow dynamics more than any other country. Signup and view all the answers

What was a significant reason for the first wave of regionalism in the early 1960s?

Emergence of the European economic community Signup and view all the answers

What factor contributed to the second wave of regionalism since the mid-1990s?

Frustration with negotiating global agreements Signup and view all the answers

What is one of the challenges in estimating the trade effects of preferential trade agreements (PTAs)?

Many different variables influencing trade volume Signup and view all the answers

Why are free trade areas (FTAs) generally attractive to governments?

They do not necessitate strong regional institutions Signup and view all the answers

What might be a possible consequence of regionalism on global trade liberalization?

It may obstruct global trade liberalization Signup and view all the answers

What is the concept of interdependence primarily associated with limiting?

National autonomy Signup and view all the answers

Which theorist is associated with the concept of international regimes that promote stability in international relations?

S. Krasner Signup and view all the answers

How does capitalism impact individual autonomy according to Marx?

It constrains individuals due to the need for reproduction of the capitalist system. Signup and view all the answers

What does the concept of 'false consciousness' refer to in Marxist theory?

The perception that workers' interests align with capitalism. Signup and view all the answers

What characterizes economic globalization today?

It is more resilient and socially embedded than previously recognized. Signup and view all the answers

What is a structuralist approach to the world economy primarily concerned with?

Viewing the economy as an integrated capitalist system. Signup and view all the answers

Which period is referred to as the first age of globalization?

1870-1914 Signup and view all the answers

What understanding of globalization is considered essential in political economy literature?

A process rather than a fixed outcome. Signup and view all the answers

What is a primary argument made by advocates of globalization regarding government policies?

More radical reforms are needed to support globalization. Signup and view all the answers

Which characteristic is associated with modernization theory?

Development is viewed as westernization of societies. Signup and view all the answers

Which statement accurately reflects critics' views on neo-liberal policies?

They ignore environmental and social dimensions of development. Signup and view all the answers

The dependency theory proposes that development and underdevelopment are:

Interconnected in a structural relationship. Signup and view all the answers

Which of the following best describes the essence of neo-statism?

State governance plays a significant role in economic development. Signup and view all the answers

What is a key aspect of the human development approach?

It emphasizes redistribution to improve societal equity. Signup and view all the answers

What factor do critics of globalization attribute financial crises to?

Systemic issues within globalization itself. Signup and view all the answers

How are the Millennium Development Goals (MDGs) related to the sustainable development goals (SDGs)?

The SDGs build on the framework established by the MDGs. Signup and view all the answers

What is a significant critique regarding the definition of development?

It sees development as an economic-only phenomenon. Signup and view all the answers

What does the term 'periphery' refer to in Raul Prebisch's view?

Underdeveloped regions disadvantaged in the global system. Signup and view all the answers

Which of the following reflects a common theme in both neo-liberal and neo-statist views?

Development is understood as a primarily national process. Signup and view all the answers

Which approach emphasizes enhancing individual capabilities and freedoms as central to development?

Human development approach Signup and view all the answers

Which of the following best captures the perspective of the proponents of neo-liberalism?

Individual entrepreneurial freedoms are essential for development. Signup and view all the answers

What objective was included in the G8 agreement regarding debt cancellation?

To redirect resources towards health and education improvements. Signup and view all the answers

What was one of the significant effects of the International World War on European economies?

Political instability due to war reparations Signup and view all the answers

What characterized the post-1945 world economy?

Unprecedented rates of economic growth Signup and view all the answers

What is embedded liberalism in the context of the post-1945 world economy?

A balance between domestic economic objectives and openness to trade Signup and view all the answers

What were the effects of rising tariffs from 1930?

Decline of world trade Signup and view all the answers

What was one of the key features of the contemporary global financial system recognized after the financial crises?

Vulnerability to periodic crises Signup and view all the answers

What role do transnational corporations (TNCs) play in the global economy?

Ownership and management of assets spanning multiple countries Signup and view all the answers

What was one of the lessons learned from the global financial crisis?

Vulnerability of interdependent economies to crises Signup and view all the answers

What was the impact of merchandise trade value in the fourth quarter of 2022?

Increased by 1% compared to the previous year Signup and view all the answers

What primarily facilitates the integration of the world economy as a single system?

Informatics technologies and communication infrastructures Signup and view all the answers

Which of the following is NOT a characteristic of globalization as discussed?

Increased nationalization of economic relations Signup and view all the answers

Which sector comprises the largest percentage of world trade?

Manufacturing Signup and view all the answers

What role did international finance play in the early stages of globalization?

It was considered an important adjunct to trade Signup and view all the answers

How did the global financial flows change after the financial crisis of 2008-09?

They reversed and became constrained by economic events Signup and view all the answers

What has been a significant trend in production since 1970 according to globalization evidence?

Rise of transnational corporations (TNCs) Signup and view all the answers

Which of the following relationships between distance, history, and culture and trade patterns is accurate?

They still influence patterns despite globalization trends Signup and view all the answers

What is observed about trade patterns as globalization progresses?

A new global division of labor is developing Signup and view all the answers

Study Notes

Chapter 1: The World Economy Pre-1914

The modern world economy emerged in the 15th and 16th centuries.
Mercantilism was the traditional pattern of commerce, focused on increasing national wealth.
Industrialized countries (Western Europe, USA, and Japan) traded with colonies more than other industrialized nations.
Tariffs were barriers to international trade.
There was no intergovernmental cooperation.
Bilateral agreements were the norm.
The gold standard provided certainty for international transactions.
The gold standard used internal deflation as an adjustment mechanism.
The First World War (IWW) caused devastation in European economies.
War reparations and wartime borrowing impacted Germany and France, UK.
Governments struggled to create a stable international financial system.
The Gold Standard was restored in 1925, but exchange rate misalignments led to its abandonment in 1931.
Tariffs increased from 1930, leading to a decline in world trade.
Closed imperial blocks became common.

Chapter 2: Historical Evolution of the World Economy

Mercantilism's core tenants were established by the 17th century:
- Dominance of national interest in economic policy.
- Central role of the state in directing economic activity.
- Importance of creating a favorable trade balance.
4 essential elements of Mercantilism:
- States’ need for security in an anarchic international system.
- Wealth as a condition for state power.
- Short-run sacrifices for long-run economic gain.
- International system viewed as a zero-sum game.

Chapter 3: The World Economy System

Economic globalization is the widening, deepening, and speeding up of worldwide interconnectedness, not inevitable.
1870-1914: the first age of globalization.
Modern economic globalization is more resilient and socially embedded.
Economic globalization is a multi-dimensional tendency.
Globalization generates emergent tendencies or systemic properties.

Chapter 5: The Financial and Monetary Order

Money and finance have political and economic implications at the international level.
Governments created international monetary regimes, including the gold standard.
The 1930s saw a major international financial crisis due to the collapse of the international lending and gold standards.
The Bretton Woods Agreements were established in 1944 to rebuild the post-World War II international monetary and financial systems.
Goals of the Bretton Woods agreements included: Rebuilding post-war economies, Promoting international economic cooperation and Creating an open, multilateral global economy.
Main elements of the Bretton Woods system
- Gold exchange standard
- Dollar convertibility for current account transactions
- Controlled capital movements

Chapter 6: Regionalism in the Global Economy

Regional trade agreements (RTAs) involve more than one country agreeing to lower barriers for members.
RTAs are an important exception to the principle of non-discrimination in trade agreements.
RTAs may have political advantages: inter-state relations, security, enhanced bargaining power.

Other Chapters (8 & 9)

These chapters cover topics such as Protectionism in a global economy, Trade, FDI and Development. This information is too scattered to be summarized effectively.

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Description

This quiz explores the crucial distinctions between economic development and economic growth, focusing on their implications for human well-being and underdevelopment. It also examines the dynamics of globalization, regionalism, and trade agreements in the modern economy. Test your understanding of these concepts with targeted questions.