INTERNATIONAL ECONOMICS 5TH
EDITION FEENSTRA EXAMS SET COMPLETE
QUESTIONS AND ANSWERS EXPERT
VERIFIED
◉ FDIs
Answer: Foreign Direct Investment
Investment made by firm/individual in one country into another
country
FDI fuels globalization and helps devloping nations acquire new tech
and capital
◉ Circular Flow of Economy
Answer: Shows how money flows through society
◉ The Product Cycle
Answer: Theory that goods are first produced in devloped countries
but as the producte becomes standaridzed, production moves to
lower-cost devloped nations, expalins shift of manufacturing from
US/Euro to East Asia
,◉ The World Bank Group
Answer: a group of five closely associated institutions that provides
financial and technical assistance to developing countries (NOT THE
WB)
◉ The Washington Consensus
Answer: Free-market economic policy prescriptions aimed at
guiding developing nations (US, World Bank, IMF)
◉ The Radical Reform Package (Shock Therapy) (Big Bang)
Answer: Sudden release of price + currency controls/ withdeal of
state subsidies and immediate trad eliberlizaiton within a country
(Big Bangwith post-Soviet Russia and lead toshort-term econ chaos
with hopes of long term market stability)
◉ Schengen Agreement
Answer: in 1995, several European countries lifted all border
controls between them, allowing for unimpeded access across
international boundaries. (allows for the 4 Freedoms (movement of
goods, services, capital, and people))
◉ OECD
, Answer: Organization for Economic Cooperation and Development
(founded to stimulate econ and world trade, called the club of rich
countries and sets global standards for tax, education and
enviromental policies)
◉ Asian Tiger Miracles
Answer: Rapid industrialization and high growth rates of Hong
Kong, Singapore, SK, and Taiwan between 1960s and 1990s (proved
that export-oriented industrialztion could move country from
poverty to wealth rapidly)
◉ Lee Hypothesis
Answer: Idea that nondemocratic systems (authoritarian) are better
at bringing about economic development (esp for poor countries)
(debate in foreign econ)
◉ Smart authoritarianism
Answer: Governing sysle that maintains strict political contorl but
uses data, market, mechanisms, and meritorcracy to ensure econ
growth (modern China?) (challenges Western idea that markets
require liberal democracy to function)
◉ Devolpment Dilemma
Answer: Tension between acieving econ growth and maintaining
social/enviromental standards
EDITION FEENSTRA EXAMS SET COMPLETE
QUESTIONS AND ANSWERS EXPERT
VERIFIED
◉ FDIs
Answer: Foreign Direct Investment
Investment made by firm/individual in one country into another
country
FDI fuels globalization and helps devloping nations acquire new tech
and capital
◉ Circular Flow of Economy
Answer: Shows how money flows through society
◉ The Product Cycle
Answer: Theory that goods are first produced in devloped countries
but as the producte becomes standaridzed, production moves to
lower-cost devloped nations, expalins shift of manufacturing from
US/Euro to East Asia
,◉ The World Bank Group
Answer: a group of five closely associated institutions that provides
financial and technical assistance to developing countries (NOT THE
WB)
◉ The Washington Consensus
Answer: Free-market economic policy prescriptions aimed at
guiding developing nations (US, World Bank, IMF)
◉ The Radical Reform Package (Shock Therapy) (Big Bang)
Answer: Sudden release of price + currency controls/ withdeal of
state subsidies and immediate trad eliberlizaiton within a country
(Big Bangwith post-Soviet Russia and lead toshort-term econ chaos
with hopes of long term market stability)
◉ Schengen Agreement
Answer: in 1995, several European countries lifted all border
controls between them, allowing for unimpeded access across
international boundaries. (allows for the 4 Freedoms (movement of
goods, services, capital, and people))
◉ OECD
, Answer: Organization for Economic Cooperation and Development
(founded to stimulate econ and world trade, called the club of rich
countries and sets global standards for tax, education and
enviromental policies)
◉ Asian Tiger Miracles
Answer: Rapid industrialization and high growth rates of Hong
Kong, Singapore, SK, and Taiwan between 1960s and 1990s (proved
that export-oriented industrialztion could move country from
poverty to wealth rapidly)
◉ Lee Hypothesis
Answer: Idea that nondemocratic systems (authoritarian) are better
at bringing about economic development (esp for poor countries)
(debate in foreign econ)
◉ Smart authoritarianism
Answer: Governing sysle that maintains strict political contorl but
uses data, market, mechanisms, and meritorcracy to ensure econ
growth (modern China?) (challenges Western idea that markets
require liberal democracy to function)
◉ Devolpment Dilemma
Answer: Tension between acieving econ growth and maintaining
social/enviromental standards
