Deck 1: Globalization and Worldwide Infrastructure Development

Question 1

The UN Commission on International Trade laws helps countries set up their own legal systems to deal with intellectual property issues

Answer 1

False

Question 2

Currency Board Arrangements allow currencies such as the Euro to have their value determined by a Board of Central Banks

Answer 2

False

Question 3

The International Labor Organization helps countries draw up their own national labor laws, social security, health and safety rules

Answer 3

True

Question 4

The International Telecommunications Union coordinates national telecommunications policies and aids the cross-border standardization of equipment, protocols and operating procedures

Question 5

The Bretton Woods system of exchange rates broke down as other world currencies kept appreciating against the US dollar, causing the US to incur major trade surpluses

Question 6

The Gold Standard system of establishing currency values in terms of gold survived until the 1970s

Question 7

Today, all countries have their own unique national currencies.

Question 8

The League of Nations failed because many countries were forced to focus on internal problems rather than external liaisons with other nations between 1919 and 1939

Question 9

The International Monetary Fund oversees international exchange rates and the orderly exchange of foreign currencies

Question 10

Many countries peg their foreign exchange rates to country/countries with whom they have the most commercial dealings

Question 11

Currency Board Arrangements have full and free convertibility for their currencies, but central banks must match foreign currency reserves with national money supplies

Question 12

The global economy has emerged without much help from the United Nations and its specialized agencies

Question 13

The World Intellectual Property Organization's task is to enforce and protect corporate patents on a worldwide basis

Question 14

During the 1945-71 period, foreign countries could use US dollars earned to buy gold at $35 an ounze

Question 15

In the Gold Standard era, currencies were evaluated in terms of their gold values to establish exchange rate values for currencies

Question 16

Currencies pegged to single or multiple currencies are not allowed any upward or downward movements at all against those currency values

Question 17

The Bretton Woods system of exchange rates was based on the gold-dollar evaluation and exchange, with other currencies pegging their exchange rates to the US dollar

Question 18

The Universal Postal Union deals with regulations concerning the global shipping industry

Question 19

United Nations' agencies were developed to oversee and integrate international infrastructures for telecommunications, aviation, shipping, trade, commercial laws and other functions

Question 20

A number of countries use the US dollar as their own official currency

Question 21

Under crawling band systems, governments adjust the range within which exchange rate values can move

Question 22

Under managed float exchange rate systems, governments do not interfere with the supply and demand market forces for their national currencies

Question 23

When Japanese firms repatriate profits from the US to Japan, this creates demand for dollars

Question 24

Independently floating exchange rates have their values determined by supply and demand for their currencies

Question 25

Crawling pegs are usually used when national exchange rates are consistently going down (i.e. depreciating) in value against other major currencies

Question 26

Crawling pegs are used when countries have consistent inflation problems causing governments to constantly appreciate their national currencies (i.e. more national currency units per dollar or Euro).

Question 27

Dollar supply consists of dollars leaving the US and being converted into foreign currencies

Question 28

When the US exports to the Euro zone in Western Europe, this increases the supply of dollars leaving the US and increases demand for Euros

Question 29

When European tourists come to the US and convert their money, this creates demand for US dollars

Question 30

Under managed float exchange rate systems, governments can influence their exchange rate values through fiscal (taxation) and/or monetary (interest rate) policies

Question 31

When European tourists go to Japan, they increase the supply of Euros leaving Western Europe and increase demand for Japanese yen

Question 32

When currencies float independently, good economic news tends to create demand for and therefore weaken the national currency

Question 33

Dollar supply consists of dollars being converted back from foreign currencies into US dollars

Question 34

When European firms export to the USA, dollars leave the US and create demand for Euros

Question 35

Under crawling band exchange rate systems, governments constantly re-peg national currency values within a pre-determined range

Question 36

Crawling pegs are usually used when national exchange rates are consistently going up (i.e. appreciating) in value against other major currencies

Question 37

Currencies pegged within a horizontal band are allowed to move slightly upwards or downwards around a pre-determined exchange rate

Question 38

When aggregate demand for dollars exceeds aggregate supply, the dollar is likely to depreciate in value

Question 39

When the European Union is doing well economically, the Euro is likely to appreciate in value

Question 40

When Japanese companies invest in the US, they create demand for dollars

Question 41

A soft, or inconvertible currency is one that is not acceptable as a means of payment outside of its country of origin

Question 42

In the currency convertibility process, countries float their currencies with the result that the currency rapidly appreciates against other world currencies

Question 43

The World Trade Organization replaced the General Agreement on Tariffs and Trade in the mid-1990s

Question 44

Major currencies such as the dollar, yen, Euro and pound sterling float independently in world currency markets

Question 45

When countries have hard, convertible currencies, they must pay for imports with soft inconvertible currencies earned from exports

Question 46

Currency convertibility is all about establishing realistic currency values acceptable to the world's financial currency markets

Question 47

International firms prefer investment in weak currency countries to enhance their sourcing prospects to strong currency markets

Question 48

When the US currency appreciates in value against major world currencies, currencies pegged to the dollar have problems exporting to non-dollar-based major markets

Question 49

The General Agreement on Tariffs and Trade (GATT) was given powers to arbitrate and make rulings on trade disputes

Question 50

Forward purchases of currencies over 1, 3, and 6 months time frames are available in all world currencies

Question 51

When the dollar moves from 0.95 Euros to 1.12 Euros, , the dollar has depreciated in value

Question 52

Developing nations all want strong, appreciating currencies to improve their export and foreign direct investment prospects

Question 53

The World Trade Organization was established in 1947-8 to oversee the trade liberalization movement

Question 54

When the dollar moves from 115 yen to 90 yen, the dollar has appreciated in value

Question 55

When the Euro moves from 127 yen to 140 yen, the yen has depreciated in value

Question 56

A convertible currency is one that is not acceptable as a means of payment outside of its country of origin

Question 57

Nations with soft, inconvertible currencies often import more than they export and in so doing build up hard currency debts

Question 58

When aggregate demand for dollars exceeds aggregate supply, the dollar is likely to appreciate in value

Question 59

The role of the International Monetary Fund is to lend money to nations to allow them to 'buy back', create demand for and stabilize their depreciating currencies

Question 60

International firms prefer investment in strong currency countries to enhance their sourcing prospects to weak currency markets

Question 61

One protectionist argument is that as jobs are exported from developed to developing countries, the developed nation's less educated labor sector suffers disproportionately as national manufacturing gets 'hollowed out'

Question 62

Free trade creates jobs but entails little job loss particularly in developed nations

Question 63

Developed and developing nations both agree that low wage rates are legitimate competitive tools in the world marketplace

Question 64

Strategic industries that many governments feel need protection usually include agriculture, military and nuclear sectors

Question 65

European economic unification (EC'92) included common industry standards for major European industries, the elimination of border controls, and privatization and deregulation of a number of industries

Question 66

The European Union originated as the European Coal and Steel Community in the late 1940s and early 1950s

Question 67

The North American Free Trade Area (NAFTA) originated in 1989 with the US, Canada and Mexico as the original members

Question 68

European economic unification (EC'92) established the Euro as the common regional currency

Question 69

Political integration of market blocs involves member states sacrificing national political and economic sovereignty to have region-wide fiscal, monetary policies and a common currency

Question 70

Private sector contributions to world development include the activities of global retailers, advances in shipping and aviation, E-commerce and global media development

Question 71

The Treaty of Rome established the European Economic Community in 1957 and had ten original members

Question 72

The World Bank is mainly concerned with helping countries develop adequate national infrastructures (roads, power etc.) and food supplies

Question 73

A major free trade argument is that it promotes global competition that benefits consumers through lower prices and increased varieties of products

Question 74

The Free Trade Agreement of the Americas has established a free trade area covering North, Central and South America

Question 75

By 2007, the European Union increased in size to 27 nations

Question 76

The political superstructure of the European Union includes a European Commission, a European Parliament, a Council of Ministers, and a Court of Justice

Question 77

Private infrastructure development is mainly organized through the United Nations

Question 78

Free trade arguments include the uneven distribution of global resources, contributing to the development of emerging nations, and the creation of jobs

Question 79

Free trade areas abolish internal tariffs among member states and instigate a common external tariff

Question 80

Common markets have no internal tariffs, a common external tariff, and free movement of labor and capital