World-Economy and Global Dynamics Quiz

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Questions and Answers

What does dependency theory assert about the flow of resources?

Resources are evenly distributed among all nations.

Resources flow from wealthy to poor countries.

Resources flow equally between developed and developing countries.

Resources flow unidirectionally from poor to wealthy countries. (correct)

According to Wallerstein's world systems theory, what contributes to inequality in wages?

The geographical location of countries.

The levels of expertise, experience, and skills. (correct)

The size of the population in the countries.

The natural resources available in each country.

What is a characteristic of economic globalization?

It favors the local production of all goods.

It highlights a growing interconnectivity of capital and goods. (correct)

It promotes complete independence among nations.

It reduces the interdependence among regions.

What is suggested to be a primary cause of poverty within the capitalist system?

Exclusion or malpractice within structural systems. Signup and view all the answers

What does economic globalization typically lead to among countries?

Greater dependency on industrial nations for resources. Signup and view all the answers

What impact does the capitalist system have on global economic relationships?

It establishes unequal relationships based on resource flow. Signup and view all the answers

Which of the following is NOT a form of interdependence highlighted by economic globalization?

Isolation from global trade. Signup and view all the answers

What is a key criticism of economic globalization?

It may lead to increased global inequality. Signup and view all the answers

What is the primary claim of modernization theory regarding countries' progress?

Countries can progress through inclusion in the global capitalist market. Signup and view all the answers

Which of the following is predominantly considered an agent of globalization?

Multinational corporations (MNCs) Signup and view all the answers

Which theory argues that structures within the capitalist system hinder the development of poorer economies?

Structuralism Signup and view all the answers

How do developing countries rely on developed nations in the context of globalization?

For raw materials and labor. Signup and view all the answers

What role do governments play in the context of globalization?

They act as mediators between globalization and national economies. Signup and view all the answers

What is a significant aspect of the debate regarding economic globalization?

It fosters mutual dependence between developed and developing countries. Signup and view all the answers

The semi-periphery in a world-economy is best described as:

A crucial component that supports the structure of the world economy. Signup and view all the answers

The concept of global economic inequality is challenging to define due to:

The diverse perspectives from various disciplines. Signup and view all the answers

Which statement characterizes the relationship between core-states and peripheral regions?

Peripheral areas can become core-states through significant economic growth. Signup and view all the answers

Which statement best reflects the concept of peripheral areas in globalization?

They often find it challenging to influence core political arenas. Signup and view all the answers

What role does economic globalization play according to its proponents?

It facilitates universal economic growth and development. Signup and view all the answers

Which of the following concepts is NOT a part of structuralism in international relations?

Neoclassical Economics Signup and view all the answers

According to the hierarchy of occupational tasks in a global economy, higher skill levels are associated with:

Core regions. Signup and view all the answers

What do experts disagree on regarding economic globalization?

Whether it fosters economic disparity. Signup and view all the answers

What is the significance of activists in the context of globalization?

They sometimes represent interests of marginalized groups. Signup and view all the answers

What concept describes the challenges faced by groups in the semi-periphery regarding their political influence?

Political marginalization. Signup and view all the answers

What is defined as the expanding interdependence of world economies?

Economic globalization Signup and view all the answers

What held the world together in the past before globalization?

Political and military domination Signup and view all the answers

Which entity uses foreign direct investment (FDI) to establish business in another country?

Multinational corporation Signup and view all the answers

What is a key consequence of cultural homogenization in the context of economic globalization?

Interests of key groups are served Signup and view all the answers

How does the International Monetary Fund (IMF) define globalization?

Integration through the movement of goods, services, and capital Signup and view all the answers

What example illustrates cross-border trade mentioned in the content?

Toyota Motor Philippines Corporation as a subsidiary of Toyota Japan Signup and view all the answers

What does Wallerstein's categorization of the modern capitalist world-economy focus on?

Worldwide division of labor Signup and view all the answers

What role does the local (national) state structure play in a world-economy?

It serves as the first point of political pressure. Signup and view all the answers

What is one primary benefit of economic globalization as discussed in the content?

Lifts people out of poverty Signup and view all the answers

What negative impact is associated with economic globalization?

Increasing inequality within and among nations Signup and view all the answers

What action did Mexico take regarding barbasco in 1975?

Nationalized its extraction and set a fixed price Signup and view all the answers

Why did the corporation sell barbasco at lower prices to its sister company in Mexico?

To increase profit margins through lower production costs Signup and view all the answers

What role do activist groups play in globalization according to the content?

They organize protests for or against a cause. Signup and view all the answers

How is the government defined in the context of globalization?

The body controlling citizens or inhabitants of a community Signup and view all the answers

What is a potential consequence of transfer pricing as illustrated by the content?

Decreased tax revenue for the local government Signup and view all the answers

Which statement best reflects the relationship between strong laws and economic innovation?

Inclusive political institutions promote innovation. Signup and view all the answers

Study Notes

Global Economic Structures

Distinction exists between the peripheral areas and the external arena of the world-economy, where the external arena can become peripheral over time.
Core states can shift to semi-peripheral status, while semi-peripheral areas can descend to peripheral status depending on global dynamics.

Economic Globalization

Ongoing debates persist on whether economic globalization fosters unity or division globally.
Proponents argue that globalization promotes universal economic growth and reduces poverty by integrating poorer nations into the world market.
Economic globalization enables the worldwide distribution of raw materials and decreases poverty through mutual dependence between developing and developed nations.

The Cold War and Economic Theories

During the Cold War, two main theories addressing global economic inequality emerged: modernization theory and structuralism.
Modernization theory posits that economic growth is achievable via integration into the global capitalist market, especially in Western nations.
Structuralism argues that the capitalist system's structure perpetuates inequality, hindering the development of poorer economies through exploitation.

Dependency and World Systems Theory

Dependency theory suggests that resources flow from underdeveloped (peripheral) countries to wealthy (core) countries, resulting in one-directional capital flow and exploitation.
World systems theory, proposed by Immanuel Wallerstein, examines historical economic development, focusing on capitalism's role in creating wage disparities and inequality among nations.

Economic Interdependence

Economic globalization fosters interdependence among countries through the trade of goods, services, and capital.
This interconnectedness has transitioned from political and military domination (empires) to economic systems that drive globalization.

Capitalism and Poverty

Recent discussions indicate that exclusion or malpractice within the capitalist framework may primarily cause poverty, rather than mere dependence on global systems.

Actors of Globalization

Principal actors include multinational corporations (MNCs), non-governmental organizations (NGOs), intergovernmental organizations (IGOs), and state governments.
Governments play a mediating role in globalization, acting as "midwives" and overseeing national economies amidst global influences.

Global Economic Inequality

Despite economic globalization promoting wealth creation, it also correlates with increasing inequality across nations, affecting distribution within countries.
Strong political institutions, inclusive systems, and democratic governance are essential for fostering innovation and economic growth.

Transfer Pricing and Corporate Practices

Transfer pricing illustrates corporate exploitation where companies report profits through overseas subsidiaries to minimize tax burdens, demonstrated by the case of barbasco in Mexico.
Nationalization efforts to control resources and set fair pricing emerged in response to exploitation by multinational corporations.

Cultural and Economic Dynamics

The modern world-economy reflects inequality, influenced by cultural homogenization and the pursuit of local identities within an interconnected global landscape.

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Description

Test your understanding of the concepts surrounding world-economies, peripheries, and core states. This quiz will explore the relationships between developed and emerging countries and how their positions can shift over time. Prepare to engage with key economic theories and models!