IEBUS Past Paper 2023 Fall Semester PDF

# End-of-Module Exams 2023 Fall Semester ## Module Code: w.BA.XX.1IntEB-IM ### Last Name: ### First Name: ## Grading Table | Performance Assessment | Weighting | Grade | Weighted Grade | |---|---|---|---| | Performance Assessment 1| 100% | | Rounded | | Module Grade (Evento) | | | | ## Mar...

# End-of-Module Exams 2023 Fall Semester ## Module Code: w.BA.XX.1IntEB-IM ### Last Name: ### First Name: ## Grading Table | Performance Assessment | Weighting | Grade | Weighted Grade | |---|---|---|---| | Performance Assessment 1| 100% | | Rounded | | Module Grade (Evento) | | | | ## Marking Table | Corrector's Initials | Task | Maximum points | Points achieved | |---|---|---|---| | base | Multiple-Choice Questions | 25 | | | base & zolb | Open Questions 1-7 | 35 | | | | Grade | 60 | | ## Answer Sheet for Multiple-Choice Questions (25 points) Indicate the correct answer for each question with a cross or checkmark. For the multiple-choice questions, ONLY your answers on THIS Answer Sheet (see below) will be considered. | Answer 1 | A. | B. | C. | D. | E. | |---|---|---|---|---|---| | Answer 2 | A. | B. | C. | D. | E. | | Answer 3 | A. | B. | C. | D. | E. | | Answer 4 | A. | B. | C. | D. | E. | | Answer 5 | A. | B. | C. | D. | E. | | Answer 6 | A. | B. | C. | D. | E. | | Answer 7 | A. | B. | C. | D. | E. | | Answer 8 | A. | B. | C. | D. | E. | | Answer 9 | A. | B. | C. | D. | E. | | Answer 10 | A. | B. | C. | D. | E. | | Answer 11 | A. | B. | C. | D. | E. | | Answer 12 | A. | B. | C. | D. | E. | | Answer 13 | A. | B. | C. | D. | E. | | Answer 14 | A. | B. | C. | D. | E. | | Answer 15 | A. | B. | C. | D. | E. | | Answer 16 | A. | B. | C. | D. | E. | | Answer 17 | A. | B. | C. | D. | E. | | Answer 18 | A. | B. | C. | D. | E. | ## Open Questions (35 points) ### Question 1: Globalization (1 point) The Guardian, 21 October 2023. About 100,000 turn out in London for pro-Palestine rally. About 100,000 demonstrators turned out in central London to show their support for Palestine and demand an end to Israel’s bombardment of Gaza. The march in Marble Arch in central London followed the 7 October surprise terror attack by Hamas and the Israeli response. Protesters held signs that read “Freedom for Palestine” and “Stop bombing Gaza”. **Name the political dimension of the globalization trend involved here. (1 point)** ### Question 2: Globalization (1 point) United Nations, 22 July 2022, press release by the Black Sea Grain Initiative: The resumption of Ukrainian grain exports via the Black Sea amid the ongoing war is “a beacon of hope” in a world that desperately needs it, UN Secretary-General António Guterres said at the signing ceremony on 27 July in Istanbul, Türkiye. The UN plan, linked to efforts to ensure Russian food and fertilizer reach global markets, supports the stabilization of spiraling food prices worldwide and staving off famine, affecting millions. **Name the political dimension of globalization trend represented by the UN involvement here. (1 point)** ### Question 3: The World Bank Governance Indicators (3 Points) To learn about the dynamics of governance, one can, for example, juxtapose national changes in the two dimensions of governance, voice, and accountability and government effectiveness. [Diagram of the world bank governance indicators is omitted here] Interestingly, some countries demonstrate a negative correlation between voice and accountability and government effectiveness. They are in the fields: **Name one real-world example for a country in Field 4** ### Question 4: GDP (7 points) * a) There are three main approaches for measuring the economic activity of a country. Name all three. Why are these equivalent? (4 points) * b) What happens to the GDP of a country if exports increase holding all other variables constant? Explain your answer. You may use a formula to support your argument. (1 point) * c) What is the difference between the consumer price index (CPI) and the GDP deflator? (2 points) ### Question 5: Growth (8 points) * a) Take the following stylized production function. $Y = A K^{0.5}L^{0.5}$ where Y is total output of the economy, A is the technology level, K is the capital, and L is the labor available in the economy. In the table below, fill in the missing values for the production function. (2 points, rounded to two decimals) | Output: Y | Technology: A | Capital: K | Labor: L | |---|---|---|---| | 100 | 2| 4 | 9 | | 16 | 5| 16 | 16 | | 540 | 10 | 16 | 81 | * b) Does the production function described in a) above diminishing or increasing returns to scale in terms of capital? Explain your answer. (2 points) * c) Based on the Solow-Swan model from the lecture, explain the growth dynamics after a sudden drop in capital. You can use a stylized graph (without specific numbers) to support our explanation (4 points) [Diagram of the solow-swan model is omitted here] ### Question 6: Price Controls (11 points) Consider a country where the demand for petrol ($Q_d$) and supply of petrol ($Q_s$) are given by the following linear functions: $Q_d = 100 - 5P$ $Q_s = 10P - 20$ where $Q_d = $ Quantity demanded in thousands of liters. $Q_s = $ Quantity supplied in thousands of liters. $P = $ Price per liter in dollars. * a) Find the equilibrium price and quantity. (No points without proper calculations). (3 points, rounded to two decimals) * b) The government believes that gasoline prices are too high and sets a price ceiling of $3. Compute the new quantity demanded and quantity supplied at the price ceiling of $3. (No points without proper calculations.) (2 points, rounded to two decimals) * c) Calculate the producer surplus (PS) with and without price controls. No points without proper calculations. (4 points, rounded to two decimals) Hint: A stylized graph might help you to identify the necessary values for the calculations. * d) Discuss the implications of the price ceiling for producers. Explain whether this is a good policy or not. (2 points) ### Question 7: Short Questions (4 points) * a) In 2022, the inflation rate in Switzerland was 2.8%, while in 2021 it was 0.6%. By how many percentage points did inflation change between 2021 and 2022? (1 point, rounded to two decimals) * b) What is the Gini coefficient for a country whose inhabitants all earn exactly the same? (1 point, rounded to two decimals) * c) What do you call a good that is excludable but non-rival? (1 point) * d) A kilogram of apples costs CHF 3.99 including 7.7% value added tax. What is the net price of one kilo of apples? (1 point, rounded to two decimals) **End of exam** # Multiple-Choice Questions (25 points) Indicate the correct answer(s) for each question with a cross or checkmark. In some cases, more than one correct answer is possible. All answers must be transferred to the answer sheet! Only the answers in the answer sheet will be evaluated. ### 1. With increasing global economic interconnectedness, state sovereignty weakens. Which of the below still lie(s) mostly under the control of the state? (More than one indicator can be correct. Incorrect answers lead to the deduction of points. You cannot score less than zero points.) (1 point) * A. Job security. * B. Illegal merchandise trade. * C. Digital data flow. * D. Political radicalization and terrorism. * E. Infrastructure development. ### 2. In August 2022, the United States passed the $369 billion Inflation Reduction Act to accelerate decarbonization, aiming for a 40% carbon emission reduction by 2030. The Act provides massive tax breaks and subsidies for green-tech companies producing in the US. The EU criticized it for potentially impacting EU competitiveness in strategic sectors. How might such an act negatively impact EU competitiveness? (1 point) * A. Because the Act only grants subsidies for green-tech companies. * B. Because the Act only aims to accelerate decarbonization in the U.S. economy. * C. Because the Act only favors U.S. production. * D. Because the Act provides tax breaks. * E. All of the above. ### 3. The relative decline of the USA in the share of world exports is mainly due to… (1 point) * A. the increase in the barriers to foreign trade by the USA, especially towards China. * B. the increase in the barriers to U.S. exports, especially from China. * C. the de-industrialization trend in the USA. * D. the industrialization process in developing economies. * E. the overall recessionary trends in the USA since the 2009 World Financial Crisis and the following Euro Crisis. ### 4. [Diagram is omitted here] Which interpretation of the chart above is correct? (2 points) * A. There is a correlation between total GDP and GDP per capita. * B. The correlation between GDP and GDP per capita is linear since we can see a clear line of progression in the chart. * C. The larger the total GDP, the higher the GDP per capita. * D. There is no correlation between total GDP and GDP per capita. * E. There is no correlation between the size of the bubble and GDP per capita. ### 5. According to Yuval Noah Harari, humans have a unique ability to… (1 point) * A. persuade other species toward peaceful cooperation. * B. build trust over repeated cooperation across the globe. * C. cooperate flexibly with countless strangers. * D. work more effectively in small group situations. * E. win the hearts and minds of other people. ### 6. The trend towards cultural differentiation of the global marketplace can result from various factors, such as.... (1 point) * A. the need to cater to local customer preferences. * B. the movement of goods, ideas, and lifestyles across borders and the emergence of a standardized global culture. * C. the increasing cultural harmonization in today's urban centers. * D. the blending of various local cultures to create a new global cultural mainstream. * E. All of the above. ### 7. To measure the quality of governance, the World Bank has defined Worldwide Governance Indicators. Read the following report on downtown San Francisco and assign its content to the indicators shown below. (More than one indicator can be correct. Incorrect answers lead to the deduction of points. You cannot score less than zero points.) (2 points) The U.S. media has been inundated with reports detailing the grim situation in San Francisco: an epidemic of street crime, rampant open-air drug use, individuals in a zombie-like state searching for their next fix, desolate and eerie office towers and stores, and an overwhelming presence of homeless individuals. In response to this crisis, San Francisco Mayor London Breed has declared a state of emergency, acknowledging the alarming rise in drug-related deaths, public drug dealing, street disorder, and violence that has spiraled "completely out of hand." The primary focus of this initiative is to intensify law enforcement efforts against drug dealers and distributors. * A. Voice and Accountability. * B. Political Stability and Absence of Violence. * C. Government Effectiveness. * D. Regulatory Quality. * E. Rule of Law. ### 8. To measure the quality of governance, the World Bank has defined Worldwide Governance Indicators. Read the following BBC news article about India dated 24 October 2023 and assign the content to the indicators shown below. (More than one indicator can be correct. Incorrect answers lead to the deduction of points. You cannot score less than zero points.) (2 points) BBC News Oct 2023: Air pollution: Delhi air turns very poor but the “worst is yet to come.” Delhi is one of the world’s most polluted cities throughout the year. Air turns especially toxic in winter due to various factors, including vehicular and industrial emissions, burning of crop remains by farmers to clear their fields for the next sowing cycle, low wind speeds and the bursting of firecrackers during festivals. A mix of factors including dust and weather patterns make Delhi the world’s most polluted capital. The polluted air causes severe health issues to Delhi residents every year. India’s pollution problem, however, is not just limited to Delhi, and Indian cities routinely dominate global pollution rankings. * A. Voice and Accountability. * B. Political Stability and Absence of Violence. * C. Government Effectiveness. * D. Regulatory Quality. * E. Rule of Law. ### 9. Which of the following are key elements of state capitalism?(1 point) * A. Long-term strategic planning of economic development. * B. Laissez-faire economic policies and minimal government intervention. * C. The prominent role of private sector companies in the economy. * D. A focus on income redistribution and wealth equality. * E. All of the above. ### 10. How is a state capitalist system exercised by the government? Which of the assertions below is NOT correct? (1 point) * A. Keeping the private sector as small as possible. * B. Introducing central and long-term economic planning. * C. Growing business champions through either direct ownership or by distributing subsidies. * D. Strong government intervention in markets, for example, through controls and providing means of production. * E. Government support in the form of subsidies and procurement. ### 11. Which of the following objectives is encompassed in the 14th Five-Year Plan (2021-2025) by the Chinese Communist Party? (1 point) * A. Prioritizing production speed, even if it compromises product quality. * B. Achieving the status of an advanced economy with a per capita GDP of $70,000 by 2035. * C. Implementing the concept of "triple circulation" by outlining three distinct markets entry strategies for advanced, developing, and least-developed economies. * D. Focusing on the expansion of agricultural production and the establishment of food security. * E. None of the above. ### 12. The Human Development Index (HDI) is based on all of the following measures APART from... (1 point) * A. life expectancy at birth. * B. expected years of schooling for children. * C. political freedom. * D. mean years of schooling for adults. * E. GNI/capita. ### 13. The latest edition of the Human Development Index (HDI) provides the following numbers on GNI (PPP) per capita rank and HDI ranking (the smaller the number, the better the ranking): | Country | GNI per capita ranking | HDI ranking | |---|---|---| | Canada | 18 | 15 | | Bangladesh | 135 | 129 | | Kazakhstan | 73 | 56 | | Mexico | 71 | 86 | | South Sudan | 168 | 191| Which country has achieved the least in human development relative to its income level? (2 points) * A. Canada * B. Bangladesh * C. Kazakhstan * D. Mexico * E. South Sudan ### 14. Using the table in Question 13 above, which country has achieved the most in terms of human development relative to its income level? (2 points) * A. Canada * B. Bangladesh * C. Kazakhstan * D. Mexico * E. South Sudan ### 15. [Diagram is omitted here] Which interpretation of the chart above is correct? (2 points) * A. There is no correlation between income and HDI. * B. We see a decreasing marginal utility when it comes to income and HDI. * C. Countries located below the curve (for example Country 1) are countries achieving high HDI scores relative to the income available. * D. We see an exponential growth in HDI score for every income increase. * E. There is a linear correlation between income and HDI. ### 16. Natural resource abundancy can hinder economic development because… (2 points) * A. the volatility of primary product prices surpasses that of manufactured goods, resulting in a heightened reliance on global market conditions which presents challenges for effective economic management and planning. * B. the repercussions of natural resource extraction may incentivize local groups to partake in rebellions or pursue secessionist aspirations. * C. the wealth derived from natural resources can act as a catalyst for violent foreign interventions owing to their strategic significance and economic value. * D. the abundance of natural resource wealth can foster opportunities for bribery and corruption, given the substantial revenues typically involved, the remoteness of many operations, and the confidentiality surrounding most contractual agreements. * E. All of the above. ### 17. From 1950-2020, global average income grew more than four-fold on average from $3,300/year to $15,200/year (inflation and purchasing parity adjusted). At the same time, the global population grew three-fold. Which assertion below is the correct interpretation of this trend? (1 point) * A. The global average income increase above means every person in the world is now four times richer than in 1950. * B. Had the economy not grown, the average income in the world would have risen to $9,900. * C. Had the economy not grown, the average income in the world would have fallen to $1,100. * D. The developments above show that, all in all, the global economy has grown twenty-one-fold since 1950. * E. Had the population not grown, the same economic growth rate means that the average income would have increased to $60,800. ### 18. [Diagram is omitted here] Countries located in which field(s) have the highest Gini coefficient? (1 point) * A. 1 * B. 2 * C. 3 * D. 4 * E. 2 & 3