Question

1. Which of the following is NOT true about Korean economy before 1960?

a. South Korea was one of the poorest country in the whole world in terms of personal income.

b. South Korea’s production facilities are totally destroyed over Korean War.

c. North Korean territory was totally destroyed over Korean War.

d. US provided infrastructure of South Korea.

2. Which of the following is NOT true about South Korea in 1980s?

a. Government pursued contractional policies.

b. Workers’ income was raised along with inflation.

c. There was high inflation in early 1980s.

d. The three-lows gave a stronger economic growth.

3. Which of the following is NOT true about North Korean economy in general?

a. Industrial capital is well maintained due to Soviet Union’s support.

b. There has been chronic shortages of food.

c. Private farming was partially allowed from 2002.

d. 2009’s redenomination was a totally failure.

4. Which of the following is NOT true about North Korea in 1960s?

a. There was a conflict between China and Soviet Union.

b. China decreased economic aid to North Korea.

c. Soviet Union maintained support to North Korea.

d. Trade with South Asian countries increased.

5. Which of the following is NOT an expected problem from the aging Korean economy?

a. decreasing labor force

b. increasing savings

c. worsened government budget deficit

d. low economic growth

6. According to lecture, which of the following is NOT correct about South Korea’s chip industry.

a. South Korea is the largest supplier in global chip market.

b. There has been a series of chicken game between chip manufacturers.

c. Each country’s government is supporting chip industry as a part of future development strategy.

d. South Korea is the most competitive in non-memory chips.

7. According to lecture, which of the following is NOT a part of automobile industry’s rear (or backward) industries?

a. plastic

b. steel

c. component

d. furniture

Answer 1

1. Before 1960, due to korean war south korea remained the poorest country for almost a decade with only $79 per capita GDP. The production facility in South Korea was destroyed due to North Korea's invasion and US aided South Korea during Korean War to defeat North Korea and USSR and CHina that were aiding North Korea in the invasion.

Therefore, the incorrect statement is "North Korea territory was completely destroyed during Korean war" the Korean war led to signing of Korean Armistice Agreement. that theoretically decided the south and north Korean boundaries.

2. During 1980s Government pursued expansionary monetary policies by lowering interest rates to promote industrial growth and domestic manufacturing through import substitution. This led to an increase in wages, increasing domestic consumption and overall demand and therefore, prices. Inflation was high in early 1980s. The three-lows i.e. low interest rate, low value of dollar and low price for grain did boost up South Korean economy.

Therefore, the incorrect statement is "Government pursued contractional policies."

3. There has been chronic shortages of food due to frequent famines. Private farming was progressively legalized partially from 2002 and then in 2010. 2009’s redenomination was a totally failure as it deprived north Korea of its savings. The Industrial capital stock in North Korea is very low due to years of underinvestment, shortages of spare parts and poor maintenance. Large-scale military spending drains out resources needed for investment and civilian consumption.

Therefore, the incorrect statement is " Industrial capital is well maintained due to Soviet Union’s support."

4. There was a conflict between China and Soviet Union between 1956- 1966, also known as SIno-Soviet Split because of which China decreased economic aid to North Korea while Soviet Union maintained support to North Korea. North Korea has been investing heavily in military equipment and acquisitions and has followed restrictive trade policies with China controlling major trade share.

Therefore, the incorrect statement is "Trade with South Asian countries increased."