Question

1. Study the following statements. Evaluate whether these statements are TRUE or FALSE [10 X 0.5 = 5 points]

1. In liberal economic theories, political power is equated with wealth.
2. The idea of “embedded liberalism” advocates a compromise between meeting domestic economic objectives and openness to international trade and investment.
3. A key tenet of economic nationalism is that the economic well-being of individuals is subordinate to the goal of state-building and the interests of the state.
4. Inclusive club goods are referred to as those goods that are characterized by lack of exclusion and lack of jointness.
5. Institutions are key instruments for resolving enforcement, distribution, and assurance problems in the international political economy.
6. According to the Heckscher-Ohlin model (The Factor Endowment Model), each country tends to import those items whose production requires intensive use of domestically scarce factors.
7. We expect a class conflict to arise in an economy that is rich in labor and capital but poor in land.
8. The Most-Favored nation Principle (MFN) requires a GATT (and subsequently the WTO) member to extend all member states the benefits of any agreement it might reach with any other state.
9. The World Trade Organization (WTO) was created after the end of the Tokyo Round of negotiations.
10. A customs union refers to an agreement that allows countries to remove tariffs and non-tariff barriers (NTBs) to the free movement of goods and services between them.

Answer 1

As we know power is the capacity of an individual to influence the others. Wealth is an important form of power as well.

1). The correct option is (True).

2). The correct option is (True).

The term Embedded liberalism was first used by American political scientist John Ruggie in 1982, it means openness to interrnational trade and investment.

3). The correct option is (true).

Economic nationalism favours state intervention over market mechanisms.The main motive of economic nationalism is the state well being and interests of state than comes the well being of individual.

4). The correct option is (true).

Club goods as we know are excludable which means that people can be denied access to them or use of them. Inclusive club goods are characterised by lack of exclusion and lack of jointness.

5). The correct option is (True).

Institutions play an important role in the econnomy, they also helps in distribution mechanisms.

6). The correct option is (True).

Heckscher ohiln theory is also called the modern theory of international trade. The theory holds that countries export what they can efficiently produce and import that what they cannot produce efficiently.

7). The correct option is (True).

The class conflict arises mainly in economies which are rich in labour and capital.

8). The correct option is (True).

When a country gives MFN clause to any country it needs to extend it to other countries as well.

9). The correct option is (False).

WTO was founded in 1 January 1995. It was created after the Uruguay round of negotiations.

10). The correct option is (True).

Customs union is a union in which there are no barriers to trade. EU is the customs union example.

Hope you got the answer.

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