Exam 2

PSC 1003

Multiple Choice (40 points)
For the following questions, choose the best answer. Each question is worth 2 points.

1. The theory of comparative advantage states that:
a. States should seek to become economically self-sufficient
b. States should specialize is a single product and engage in trade with other states to
obtain other goods.
c. The invisible hand will keep the market in equilibrium, which will benefit the
common good
d. States should pursue mercantilist economic policies
e. None of the above

2. A Chinese firm, subsidized by the Chinese government, exports widgets to the United States
and sells them at less than the cost of production. The United States will most likely retaliate
through the imposition of:
a. A tariff on all Chinese goods
b. Health and safety regulations
c. TRIMs
d. Anti-dumping duties
e. An embargo

3. Which of the following is not a behind-the-border policy?
a. Fiscal policy
b. Monetary policy
c. Macroeconomic policy
d. Microeconomic policy
e. Trade policy

4. Liberals argue that the most effective method for dealing with terrorism is:
a. The maintenance of American hegemony
b. Balancing power between the United States and other world powers
c. Spreading democratic values to the Middle East
d. Strengthening international regimes and international law
e. None of the above

5. Strategic trade theory argues that:
a. Governments should create state-owned industries
b. Tariffs should be eliminated in order to expand the global economy
c. Governments should invest in certain businesses to make them more competitive in
the international economy
d. Foreign companies should be barred from investing in national security industries
e. None of the above

6. Neoconservatives argue that:
a. The United States should engage in pre-emptive strikes to remove any threat to
American hegemony.
b. Rising powers such as China and Russia must be accommodated in order to insure a
balance of power in the international system.
c. Alliances are unreliable in the global war on terror and the United States must act
unilaterally
d. Terrorism is a law enforcement problem, not a military problem.
e. Both A and C

7. Which of the following is associated with the identity perspective and ethnic conflicts?
a. Partition creates incentives for separatists movements.
b. Ethnicities are inherently conflictual.
c. Poverty increases competition between ethnic groups for scarce resources.
d. Social discourse justifies ethnic discrimination.
e. None of the above

8. Under a managed float exchange rate system:
a. The market alone determines the value of a states currency
b. Governments intervene in the currency market in order to maintain the value of their
currency.
c. Currencies are backed by gold
d. Private investors collaborate with governments to maintain the value of a currency
e. Both B and D

9. A developing state demands that a multinational corporation include a certain percentage of
domestically produced inputs in its production process as a condition for investment. This action
by the state is an example of:
a. TRIMs
b. TRIPs
c. National security export controls
d. A tariff
e. Anti-dumping restrictions

10. Which of the following would identity theorists propose as a solution to ethnic conflict?
a. Democratic reforms and truth and reconciliation commissions
b. Partition of the state
c. Strengthening and reforming state institutions
d. External intervention through the United Nations
e. None of the above

11. A terrorist group detonates a bomb in a government building. They call in a warning and
allow enough time to evacuate the building before they set the bomb off. This would be an
example of:
a. Demonstrative terrorism
b. Destructive terrorism
c. Suicide terrorism
d. State terrorism
e. None of the above

12. When individuals act out of self-interest in a competitive market, they inadvertently
contribute to the public good. This is the theory of:
a. Comparative advantage
b. The invisible hand
c. Mercantilism
d. Strategic trade
e. Complex interdependence

13. The United States raises its interest rates. International investors respond by transferring
large amounts of money from Mexico to the U.S., causing an economic crisis in Mexico. The
Mexican government is forced to cut social spending in order to respond to the crisis. This is an
example of:
a. Complex interdependence
b. Sensitivity interdependence
c. Dependency
d. Vulnerability interdependence
e. None of the above

14. Those of the liberal perspective believe that economic development will decrease the
likelihood of terrorism; however, those of the _______ perspective argue that the causes are not
economic but rather the result of oppressive regimes and that political reform is the best to
spread values of freedom and tolerance.
a. liberal
b. identity
c. realist
d. critical theory

Matching
For the following questions, match the perspective to the appropriate statement according to the
following choices:
A. Realist
B. Liberal
C. Identity

15. Free trade systems can only flourish under a security umbrella provided by a hegemonic
power.

16. A free trade system requires strong international institutions to thrive.

17. States should take an inward-first approach to economic growth so they can enter the world
economy from a position of strength.

18. Terrorism can best be addressed through a combination of international law enforcement,
arms control, and fostering economic development in the developing world.

19. The information revolution is one of the most significant factors in the expansion and
integration of the global economy.

20. Intra-state ethnic conflict can best be solved by separating the warring groups through the
partition of the state.

Identifications (20 points)
Write a brief definition (2 or 3 sentences) of four of the following terms. Where appropriate, use
examples to further illustrate your definition. Each answer is worth 5 points.
1. Unilateral trade liberalization
2. Economies of scale
3. Suicide terrorism
4. Sensitivity interdependence
5. Peacekeeping activities

Essay (40 points)
Choose one of the following questions and write a detailed response. Be sure to answer each
part of the question in as much detail as you believe is necessary.

1. Choose either:
1. Hegemonic Stability Theory or
2. Complex interdependence
Describe how this theory explains globalization and the integration and expansion of the global
economy. Specifically, what goals and policies does this view promote? What actors are
involved? What challenges do these actors face? What predictions does this theory make for the
future of the global economy?

2. Compare and contrast the realist and liberal analyses of ethnic conflict. What are the major
causes of ethnic conflict? What solutions does each of these perspectives propose? Which do
you think provides the best insight into ethnic conflict?

3. Discuss the neoconservative approach to the problem of terrorism. From what perspectives
do they draw their worldview? What strategies do they advocate to deal with the problem of
international insecurity and terrorism?