Chapter 18 Self-test questions

. What are the five vectors of economic incentives?

Goals, resource constraints, institutional constraints, information, and time

Goals, resource constraints, institutional constraints, state constraints, and time

Resource constraints, institutional constraints, state constraints, time, and information

Information, time, goals, institutions, and the state

. How does economics help us understand human action?

Economics as the science of individuals making decisions as related to resource allocations

Economics is the science of capitalism and how humans respond to the global market.

Economics is the science of social behaviour.

Economics helps us understand human action by demonstrating that the behaviour of states is governed favourable trade agreements and building strong domestic markets. Thus, human action behaviour is dictated by economic considerations.

. What role does 'Information' play in the economic science of decision making?

Information is not important to decision making in economic theory; rather, it is an actor's perceptions of situations that will inform their decision-making process.

Information has no special significance to economic decision making, which is guided more by external forces that coerce actors than their own rational choices.

Information plays a significant role in decision making because, although theory asserts that actors act in their own best interest, 'rational action' depends on the information available to them at the time.

Information has become an important resource in the 21st century and can be sold and traded as a market commodity.

. Which of the following is not an economic tool of security policy?

Sanctions

Diplomacy

Trade

Aid

. How do institutional constraints affect behaviour?

Institutional constraints limit the amount of resources to be spent on some good and force actors to choose how to manage the limited wealth available to them.

Institutions are the social norms and expectations that affect an actor's goals and ambitions.

Institutional constraints refer to tools of the state such as schools, prisons, and hospitals; the provision of resources for these institutions makes demands on political leaders.

Institutions are humanly devised constrains that structure human interaction; they are man-made rules that guide decision making and govern behaviour.

. Which of the following scenarios best represents the type of sanctions common since the end of the Cold War?

Leader A denies normal economic relations with the state of Leader B.

Leader A denies normal economic relations with the business associates and family of Leader B.

Leader A ends all trade in goods and services with businesses, institutions, and markets of Leader B's state.

Leader A ceases normal economic activity with the general domestic market of Leader B's state, but continues select relations with the business and family of Leader B.

. What is the function of sanctions?

As a means of exerting economic power to advance peace and freedom

To end economic support for morally unacceptable regimes

To isolate dangerous regimes and weaken threats to regional or global security

All of the above

. In finance, what are two ways in which people benefit from access to the market?

The ability to trade currency internationally and the ability to trade weak currency for strong currency

The ability to trade weak currency for strong currency and the ability to finance today's consumptions with tomorrow's income

Debt and equity

The ability to take on debt and the ability to trade internationally

. Which of the following is not a motivation for utilizing aid as an economic policy for security?

To reward recipients for the cessation of negative behaviour, such as human rights abuses

To incentivize recipients to act in ways beneficial to the donor

Compassion for the human suffering of others

To influence recipients or potential recipients through granting or denying aid

. What is a fiat currency?

A fiat currency is a type of currency that does not have intrinsic value and is established as legal tender through government regulation.

A fiat currency is a type of currency, like gold, that has intrinsic value.

A fiat currency is a currency that is controlled by international markets.

A fiat currency is a currency that changes value depending on the strength of a state's security.

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