Chapter 18 Self-test questions

. Which of the following is not a purportedly beneficial outcome of the globalization process?

The redistribution of wealth, addressing disparities in economic and resource allocation across the globe through a sense of greater 'interconnectedness'.

Increased social and political interaction among organizations and individuals across the world.

Growing interdependence in economic relations, such as trade, investment, finance, and the organization of production globally.

A global market that has demonstrated the ability, if left unchecked, to reduce poverty and make substantial economic gains.

. Which of the following statements best describes our understanding of the term 'globalization'?

Globalization refers to the process by which shared hegemonic values pervade societies across the globe, drawing them into an ideological community, most often based on the economic principles of capitalism.

Globalization is characterized by the intensification of worldwide social relations as a result of technological developments, global economic activity, the gearing of socio-economic activity towards producing commodities to satisfy the desires of 'absent others', and the global scale and reach of enterprises.

Globalization is best described as the 'shrinking' of the global community, drawing people into closer contact with one another primarily at the economic and technical levels. This process began in the early 20th century and was based on the ideological expeditions that originated from Western Europe.

Globalization has occurred since the 1980s, originating in Western Europe as a centre of political power and technological advancement. The process is a direct result of technological advancement in communications and travel industries that facilitate the efficient transportation of physical objects, people, and ideas across the globe.

. Which is not a main agent of neoliberal globalization?

The International Monetary Fund (IMF)

The World Trade Organization (WTO)

The International Labour Organization (ILO)

The World Bank

. How have the World Bank and International Monetary Fund, as international financial institutions (IFIs), affected the development of poorer countries?

Financial policies advocated by the World Bank and IMF were readily adopted by developing countries that sought to bring their economic development into line with wealthier nations. The IFI's focus has been on achieving human security and the promotion of development at a societal level.

Through the implementation of specific financial policies adopted at the behest of global financial institutions, many developing countries have gained economic prosperity and the correlating levels of human security.

The World Bank and IMF tend to operate in an economic arena that includes only major financial institutions and wealthy states; coupled with a respect for sovereignty, the scope of such institutions does not reach to interference in national politics.

IFIs identified the economic failings of developing countries as being the result of political problems. Thus, IFIs adopted an approach that involved political and economic restructuring of these states, coercing governments into the adoption of specific financial policies designed to promote debt repayment and economic development.

. Which of the following is not one of the 10 steps of The Washington Consensus?

Fiscal Discipline: budget deficits of no more than 2 per cent of gross domestic product (GDP).

Tax Reform: broadening the tax base, cut marginal tax rates, improve tax administration.

Property Rights: legal reforms to secure property rights
without excessive costs and to regularize the informal
sector.

Nationalization: state enterprises should be protected.

. What, according to Classical economic theory, was the purpose of Mercantilism in the 18th century?

Mercantilism was a means by which to strengthen the sovereign state, and inherently linked to international conflict.

Mercantilism was a means by which to promote societal security for the populations of states.

Mercantilism was a route to increasing imports and transnational trade.

Mercantilism was not a significant economic theory until after the 18th century.

. Which of the following are economic objectives of IMF adjustment policies?

Devaluation to promote exports and reduce demand for imports by raising their prices.

Tighter monetary and credit policies with higher interest rates to reduce overall demand, and thus demand for imports; to limit or reduce the rate of inflation.
inorrect

Public spending cuts to reduce the budget deficit and slow the growth of government debt.

All of the above.

. Which of the following best describes the existing legacy of structural adjustment policies?

Structural adjustment policies have been largely successful in achieving their aims of macroeconomic security in the developing world.

The neoliberal principles on which structural adjustment policies have been based have proven well suited to promoting human welfare in developing countries.

Neoliberal based adjustment policies have caused great and unnecessary hardship in developing countries and there is still no evidence they achieved their objectives for macroeconomic stability and growth.

There is significant evidence that structural adjustment policies have promoted economic growth and macroeconomic stability in the countries in which they were applied.

. Which of the following is an impact of common structural adjustment policies on the poor?

Cost of imports soar, including vital resources such as imported medicines. Basic food prices rise, putting even greater pressure on already stretched household budgets.

Reduced health, education, and social welfare spending and the introduction of cost-recovery and user-fees put healthcare and education beyond the reach of many ordinary people. Public sector redundancies and salary freezes lead to fewer teachers and doctors.

Massive redundancies and increased unemployment with no social security provision push families deeper into poverty. Farmers and small companies can no longer afford to borrow
money and are forced to reduce production or go out of business.

All of the above.

. How might global inequality present a threat to global security?

Human security is threatened by global inequality, because three quarters of the world population do not share the benefits of globalization. However, this inequality does not translate into political instability or involve military action.

Global inequality creates disenfranchised populations who, although discontented with their situation, lack the agency to rebel or protest.

Revolutionary uprisings are likely to occur; people of the world who have been left behind by neoliberal globalization can become radicalized and rebel against those who have benefited from the economic policies that have failed them.

Global inequality does not present a significant threat to global security.

Chapter 18 Self-test questions

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