Globalization and Governance Quiz

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Questions and Answers

What is a consequence of hyper-globalization policies combined with supranational institutions?

National sovereignty is diminished (correct)

Supranational institutions have no effect on national policies

Countries can choose their national policies freely

There is an increase in race to the bottom

The European Union allows full delegation of all domestic policies to supranational governance without retaining any national control.

False

What is a challenge posed by globalization regarding governance?

Providing institutional underpinnings that are both democratic and technocratic.

In federal systems like the US or Germany, the free flow of goods, investments, and people is balanced with _____ to prevent a race to the bottom.

federal legislation Signup and view all the answers

Match each type of integration with its corresponding feature:

Hyper-globalization = Free trade and movement of capital Democracy = Democratic elections at the federal level Supranational governance = Regulation of profit making for fairness Race to the bottom = Deterioration of labor and environmental standards Signup and view all the answers

Which of the following best describes a true public good?

It is available to everyone without competition Signup and view all the answers

Fiscal correctness is considered to be the same for all countries.

False Signup and view all the answers

What is one function of money mentioned in the content?

Means of payment or unit of account Signup and view all the answers

Austerity measures are implemented by a country after a _____ period of time.

while Signup and view all the answers

Match the following terms related to money with their definitions:

Public Good = A good available to everyone without exclusion Common Good = A good that is enjoyed by an individual as well as by others Money = A monetary instrument acceptable as means of payment Barter = A method of trade that requires a double coincidence of wants Signup and view all the answers

What is one potential consequence of pushing for deeper globalization?

Aggravating the undermining of domestic rules Signup and view all the answers

What is the main difference between money and finance?

Money is related to the present, while finance is dependent on time and the future. Signup and view all the answers

Harmonizing trade rules across countries is always beneficial for all involved.

False Signup and view all the answers

Bonds are considered a promise between two agents concerning the present.

False Signup and view all the answers

What does the freer movement of goods and capital limit regarding national policies?

The effectiveness of policies to stabilize aggregate demand and employment. Signup and view all the answers

Hyper-globalization is ruled out if national __________ and democracy endure.

sovereignty Signup and view all the answers

What do equities represent in finance?

Stocks or shares. Signup and view all the answers

The ______ of payments is a statement of all transactions made between entities in one country and the rest of the world.

balance Signup and view all the answers

Match the aspects of globalization with their corresponding impacts:

Movement of labor = Gains for some, losses for others Freer movement of capital = Seeking lower regulations Deeper globalization = Weakening domestic rules Harmonizing trade rules = Imposing uniform regulations Signup and view all the answers

Match the following financial instruments with their descriptions:

Bonds = Inter-temporal promises about future transactions Equities = Ownership in a company through stocks Derivatives = Contracts based on the future price of an asset Loans = Capital provided by a lender to a borrower Signup and view all the answers

What is a trilemma mentioned in relation to globalization?

Balancing gains from trade with domestic stability Signup and view all the answers

Hyper-globalization can be implemented without any opposition from citizens.

False Signup and view all the answers

What is suggested as a risk associated with the financial sector?

The financial sector's continuous growth makes it inherently insecure. Signup and view all the answers

What can happen if the losers from globalization are ignored?

Globalization may become politically unsustainable in a democracy. Signup and view all the answers

The Young Plan aimed to increase international financing to Germany after World War I.

True Signup and view all the answers

What crisis is anticipated following the COVID crisis according to the content?

A financial crisis due to accumulated debt. Signup and view all the answers

What is the consequence when a country assesses that the costs of maintaining currency convertibility exceed the benefits?

The country will abandon its promise of convertibility. Signup and view all the answers

In a closed global economy, the sum of world current accounts equals zero.

True Signup and view all the answers

What does the N-1 issue imply about the ability of countries to independently pursue national exchange rate targets?

Only N-1 out of N countries can independently pursue a national exchange rate target. Signup and view all the answers

The issuing country must compare the benefits of holding its commitment towards convertibility with the ______ of doing so.

costs Signup and view all the answers

Match the following terms with their corresponding descriptions:

N-1 Problem = Only N-1 out of N countries can experience a surplus. Convertibility = The ability to exchange currency at a fixed price. Independent Exchange Rates = There are only N-1 independent exchange rates among N currencies. Balance of Payments = The sum of world exports equals the sum of world imports. Signup and view all the answers

Which of the following is a necessary arrangement due to the N-1 issue?

Informal arrangements to support sovereign targets. Signup and view all the answers

Firms with surpluses can lead to all countries experiencing a surplus simultaneously.

False Signup and view all the answers

What is one implication of the N-1 issue for the international monetary system?

There must be practical arrangements for making sovereign targets reciprocally consistent. Signup and view all the answers

What is the primary purpose of a store of value?

To retain value over time Signup and view all the answers

The Gold Standard allowed currencies to be converted into gold at varying prices across different countries.

False Signup and view all the answers

What are Special Drawing Rights created by the IMF?

Flat money distributed among member countries. Signup and view all the answers

The Gold Standard was established in the _____ century and lasted until 1914.

19th Signup and view all the answers

Match the following countries with their roles in the Gold Standard system:

Britain = Led the world economy during Pax Britannica Germany = Adopted the Gold Standard following British precedents United States = Later became a major player in the Gold Standard France = Participated but had different monetary strategies Signup and view all the answers

What did the repeal of export restrictions on gold coins signify in 1819?

The establishment of the Gold Standard Signup and view all the answers

All major currencies during the Gold Standard period were convertible into each other at fixed prices.

True Signup and view all the answers

What was the relationship between gold reserves and paper currency during the Gold Standard?

Paper money supply was issued in proportion to gold reserves. Signup and view all the answers

Under the Gold Standard, economic agents could convert one unit of currency A into _____ units of currency B directly.

two Signup and view all the answers

What characterizes the adjustment burden of imbalances in a symmetrical economic system?

All countries adjust equally Signup and view all the answers

Study Notes

Global Economic Policies and Institutions

Industrial Revolution and Pax Britannica
- Discussion of trade, money, and finance interconnections
World War I and Aftermath
- Disintegration and consequences for global economic systems
World War II and Aftermath
- Bretton Woods era and its post-war economic arrangements
Financial Globalization
- A game-changing event in global trade, money, and finance
New Developments in Finance
- Blockchain technology, cryptocurrencies, CBDCs, and decentralized finance
Economic Interdependence
- Mutual dependence of economic actors; national reliance on others' actions; structural transformation in the global economy; success of Britain.
Dependence vs Interdependence
- Relationships between actors require considering dependencies on each others' actions; perfect competition vs. conditions of oligopoly.
Historical Perspective Between Two Wars
- Disconnected world concerning trade, impacted by tariffs; financial considerations and autarky; flexible exchange rates were present.
Bretton Woods Conference
- Significance of this meeting during WWII; Agreement on fixed exchange rates in 1971; Economic crises like Mexico crisis 1985; South-East Asian tigers crisis 1997/98; resemblance to current global recession

Globalization and Rodrik's Policy Trilemma

Globalization's impact on winner-loser dynamic
Consumption gains alongside sustainability concerns and economic justice issues
Environmental and economic justice issues in the globalization context
Political trilemma, trade, money, finance in interconnected context
- Hyperglobalization vs. democracy vs. national sovereignty (trade-off);
- Need to choose two of the three given global economic context.

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Description

Test your knowledge on the impact of hyper-globalization policies and the role of supranational institutions. This quiz covers concepts like public goods, fiscal correctness, and the implications of deeper globalization. Expand your understanding of how globalization influences governance structures.

Globalization and Governance Quiz

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Podcast

Questions and Answers

What is a consequence of hyper-globalization policies combined with supranational institutions?

The European Union allows full delegation of all domestic policies to supranational governance without retaining any national control.

What is a challenge posed by globalization regarding governance?

In federal systems like the US or Germany, the free flow of goods, investments, and people is balanced with _____ to prevent a race to the bottom.

Match each type of integration with its corresponding feature:

Which of the following best describes a true public good?

Fiscal correctness is considered to be the same for all countries.

What is one function of money mentioned in the content?

Austerity measures are implemented by a country after a _____ period of time.

Match the following terms related to money with their definitions:

What is one potential consequence of pushing for deeper globalization?

What is the main difference between money and finance?

Harmonizing trade rules across countries is always beneficial for all involved.

Bonds are considered a promise between two agents concerning the present.

What does the freer movement of goods and capital limit regarding national policies?

Hyper-globalization is ruled out if national __________ and democracy endure.

What do equities represent in finance?

The ______ of payments is a statement of all transactions made between entities in one country and the rest of the world.

Match the aspects of globalization with their corresponding impacts:

Match the following financial instruments with their descriptions:

What is a trilemma mentioned in relation to globalization?

Hyper-globalization can be implemented without any opposition from citizens.

What is suggested as a risk associated with the financial sector?

What can happen if the losers from globalization are ignored?

The Young Plan aimed to increase international financing to Germany after World War I.

What crisis is anticipated following the COVID crisis according to the content?

What is the consequence when a country assesses that the costs of maintaining currency convertibility exceed the benefits?

In a closed global economy, the sum of world current accounts equals zero.

What does the N-1 issue imply about the ability of countries to independently pursue national exchange rate targets?

The issuing country must compare the benefits of holding its commitment towards convertibility with the ______ of doing so.

Match the following terms with their corresponding descriptions:

Which of the following is a necessary arrangement due to the N-1 issue?

Firms with surpluses can lead to all countries experiencing a surplus simultaneously.

What is one implication of the N-1 issue for the international monetary system?

What is the primary purpose of a store of value?

The Gold Standard allowed currencies to be converted into gold at varying prices across different countries.

What are Special Drawing Rights created by the IMF?

The Gold Standard was established in the _____ century and lasted until 1914.

Match the following countries with their roles in the Gold Standard system:

What did the repeal of export restrictions on gold coins signify in 1819?

All major currencies during the Gold Standard period were convertible into each other at fixed prices.

What was the relationship between gold reserves and paper currency during the Gold Standard?

Under the Gold Standard, economic agents could convert one unit of currency A into _____ units of currency B directly.

What characterizes the adjustment burden of imbalances in a symmetrical economic system?

Study Notes

Global Economic Policies and Institutions

Globalization and Rodrik's Policy Trilemma

Studying That Suits You

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