GEC04-MODULE 2

EVALUATION
ASSESSMENT TEST. Now that we are finished with our first lesson, let us try to
evaluate the learning you have presumably gained by answering these questions. At
this stage, you might want to review and scan the module. Then you may start
answering. Please be honest with your responses and try not to look or even take a
glimpse on the text that we have studied as you make your responses. A. Identification.
On the blank, write the word or group of words being defined or referred to. (16 pts.)
Economic globalization 1. The increasing interdependence of world economies as a
result of the growing scale of cross-border trade of commodities and services, flow of
international capital and wide and rapid spread of technologies
Natural barriers 2. Government policies which place restrictions on international trade
like tariffs quotas or embargo
International Monetary Fund 3. An international financial institution which is
considered as the lender of the last resort
The World Trade Organization 4. An international government organization that
formulates the rules of trade between nations
Multinational Corporation 5. Corporations that operate in at least a country other than
the country where it originated
The World Systems Theory 6. A theory proposed by Immanuel Wallerstein in which he
divided the world economic system into a hierarchy of three types of countries
depending on the way they are integrated into the capitalist world system
Core Countries 7. According to Wallerstein what group of countries own most of the
world's capital and technology and have great control over world trade and economic
agreements
Third World Debt 8. Term used by Lichauco that refers to the developing countries
inability to free themselves from debts acquired from First World-dominated financial
institutions and private banks, due to burdensome nature of most loans
Neocolonialism 9. A form of indirect colonialism in which one country is dominated by
economically, culturally, or politically by a more powerful country
Gold Standard 10. A precious metal that was believed to guarantee a noninflationary,
stable economic environment, and a means of accelerating international trade.
The Bretton Woods System 11. A system founded in 1944 which replaced the gold
standard and aided capitalist countries toward achieving closer economic integration
Fiat Money 12. Currencies that are not backed by precious metals and whose value is
determined by their cost relative to other currencies
 Bretton Woods Agreement and System 13. From the establishment of the Bretton
Woods system, what currency became the world‟s leading, if not unchallenged,
international currency?
John Maynard Keynes 14. British economist who believed that economic crises occur
not when a country does not have enough money, but when money is not being spent
The General Agreement on Tariffs and Trade 15. Established Iin 1947 whose main
purpose was to reduce tariffs and other hindrance to free trade.
Multinational Corporation 16. Simply refers to large companies that operate in many
different countries
B. True or False. On the blank before each number, write “TRUE” if the statement is
correct and “FALSE” if otherwise. (10 pts.)
TRUE 1. According to the UN, the fast globalization of the world‟s economies over
recent decades is mainly due to the rapid development of science and technologies.
TRUE 2. Global corporations provide a forum for negotiating agreements aimed at
reducing international trade barriers
TRUE 3. Core countries generally provide labor and materials to peripherala countries.
TRUE 4. The IMF and the WB are financial institutions aimed to help the ecological
stability of the world.
FALSE 5. Most of the time, debtor countries of IMF and WB are required to implement
structural adjustments that only cause impoverishment for those countries
TRUE 6. The gold standard allows governments to freely and actively manage their
economies by increasing or decreasing the amount of money in circulation as they see
fit.
FALSE 7. The high point of global Keynesianism occurred in Western economies when
government poured money into their economies resulting in general economic growth
and reduced employment.
TRUE 8. According to neoliberals, government intervention in economies distort the
proper functioning of the market
TRUE 9. The growth of global corporations enabled wide-scale global market
integration.
TRUE 10. Host governments benefitted much from the presence of global corporations.
C. Enumeration. (15 pts.)
1 – 2 2 most financially powerful institution which play a big role in the global economy
*World Bank
*International Monetary Fund
3 – 5 3 types of countries according to Wallerstein
* According to Wallerstein, the world economic system is divided into a hierarchy of
three types of countries: core, semiperipheral, and peripheral.
6 – 8 3 capitalist globalization‟s main international institutions whose dominance is
being questioned
* economic globalization, cultural globalization, and political globalization.
9 – 11 3 economic policies advocated by the Washington Consensus and neoliberals
* 1) fiscal discipline; 2) redirecting public expenditure; 3) tax reform
12 – 15 4 attributes of global corporations
*These consist of public relations, ethics, corporate structure, and leadership.
D. Discussion. (10 pts.)
1. Discuss why economic globalization remains an uneven process with some
countries, corporations, and individuals benefitting more than others.
* The world economy has become more unequal over the last two centuries.The nations
that gained the most from globalization are those poor countries that changed their
policies to exploit it, while the ones that gained the least did not, or were too isolated to
effectively change economic and political policy.
2. Explain the basic difference of Global Keynesianism and neoliberalism.
* The Keynesian theory presents the rational of structuralism as the basis of economic
decisions and provides support for government involvement to maintain high levels of
employment. In contrast the Neoliberal theory attributes the self-interest of individuals
as the determinant of the level of employment.