1. Why there is so little formal work in Peña Blanca?
It is a resort town that exists mostly to provide seasonal service to tourists.
The town’s political problems have spilled over to its economy.
Town residents prefer to freelance.
It is a poor, rural town whose economy and infrastructure are not strong enough to support regular jobs.
2. What was the goal of the Bretton Woods conference in 1944?
to finance agricultural projects in Latin America
to draft a defense pact against the Soviet Union
to craft a new environmental treaty
to prevent a future economic collapse through international cooperation
3. Approximately what percentage of the world is impoverished?
4. When numbers are adjusted for purchasing power parity it means that which of the following is true?
What you can buy for $10 in the U.S. is equivalent to what citizens of another country can buy for $10 U.S. in their country.
Every country in the world uses U.S. dollars in their economies.
A Big Mac in two different countries will cost exactly the same.
15 units of local currency (such as kwachas) are equal to 15 U.S. dollars.
5. What does the term Global South refer to?
the geographic area of the world where most developing countries are located
the poorest areas of the developing world
the Southern Hemisphere
6. According to Moustafa Bassiouny, the economist interviewed in the clip, what effect do subsidies have on the Egyptian government’s finances?
They have had a negligible effect on the country’s finances.
They have helped raise the government’s revenue.
They are a major cause of the country’s deficit.
They have forced the resignation of the Minister of Finance.
7. What does it mean if a country has a “fixed” exchange rate?
the value of the country’s currency is tied to the value of another currency
the value of the country’s currency is “fixed” to an arbitrary value that is adjusted every year
the value of the country’s currency is “fixed” by the IMF
the value of the country’s currency is tied to the New York Stock exchange
8. How much of the Egyptian budget goes toward subsidies?
9. What measure have developing countries been taking to make up for the money they lost due to the recession?
creating new and improved trade partnerships
boycotting the United Nations
waging war with their neighbors in order to gain new assets
borrowing even more money
10. Which of the following was a consequence of poor countries’ “monetization” of their deficits?
national budgets were balanced
inflation decreased rapidly
citizens’ purchasing power decreased
the divide between government revenue and expenditures narrowed
11. Which of the following BEST explains why uneducated and poor young men may be attracted to rebel groups?
They are seeking some sort of leadership figure.
They see no value in ordinary methods of climbing out of poverty.
They are seeking to avenge injustices done to their communities.
They are captivated by the chance for power that a rebel group offers.
12. Civil war impacts a nation’s economy. On average, a seven-year war will have what effect on a country’s income per person?
It will be one-third of the level it would have been in peacetime.
It will be half of what it would have been in peacetime.
It will be 15 percent lower than it would have been in peacetime.
It will be higher than it would have been in peacetime.
13. How does modern civil war differ from war in the early 20th century?
In modern civil wars rebel movements almost never have leaders, but in early 20th-century wars rebel movements were highly organized.
In modern civil wars around 90 percent of casualties are usually civilians, but in early 20th-century wars less than ten percent were civilians.
In modern civil wars most fighters use knives, but in early 20th-century wars firearms were much more common.
In modern civil wars rebels enjoy large popular support, but in early 20th-century wars rebels had almost no popular support.
14. Which of the following statements about the relationship between countries’ incomes and their prospects for sustained peace is TRUE?
The prospect for sustained peace after civil war is the same for high-income and low-income countries.
High-income countries are more likely to relapse into civil war than countries with low incomes.
Low-income countries are more likely to relapse into civil war than countries with high incomes.
There is no relationship between a country’s income and its likelihood of relapsing into civil war.
15. According to the video, why have Radio Mogadishu journalists been living at the broadcasting company’s headquarters?
The Al-Shabaab militia has repeatedly threatened to kill them.
They are fleeing famine.
They cannot afford to live elsewhere.
They want to be in the heart of the city as new political events unfold.
16. Which of the following is true about Sierra Leone?
(under “People and Society”) It has one of the world’s lowest maternal mortality rates.
(under “Introduction”) Around a third of its population was displaced during the civil war that ended in 2002.
(under “People and Society”) Less than 10 percent of its population lives in urban areas.
(under “Economy”) Automobile manufacturing is one of its primary industries.
17. When a nation is ruled by one large party, there is a tendency to see which of the following outcomes?
an alliance between the incumbents and election officials to ensure incumbents are reelected
mutually beneficial compromises to keep real challenges from emerging
a complete inability to develop widespread dissatisfaction with the status quo
regulation and legislation intended to reward opposition and punish supporters
18. Extractive institutions tend to arise in which kinds of nations?
nations that have political power concentrated in the hands of a small group
nations that have political instability
nations that have laissez-faire economic policies
nations that are poor
19. Which of the following is true about North Korea?
(under “Economy”) Its GDP per capita (PPP) puts it among the richest third of all countries.
(under “Government”) It is a democracy.
(under “People and Society”) Its life expectancy is higher than the life expectancy in South Korea (~80 years).
(under “Economy”) One of its most important industries is military products.
20. Historically speaking, when a country has been unable or unwilling to reform its extractive institutions, how have its citizens reacted, according to Acemoglu?
by peacefully protesting
by leaving the country
by appealing to religious authorities
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