Ch. 12 - Sustainable Development

Question 1

The first decade of the 21st century experienced extreme uncertainty and risk because of the

Answer 1

2007-2008 financial crisis

Question 2

Beck (1986) asserts the two main reasons for the current societal problems are the inability of
modern societies to produce enough

Answer 2

stability and sustainability.

Question 3

firmness in position, permanence, and resistance to change, especially in a disruptive way. In other words, avoiding large swings in
economic activity, high inflation, and excessive volatility in exchange rates and financial
markets.

Answer 3

Stability as defined by the International Monetary Fund (2012)

Question 4

The challenge in economic stability is that __________ should be avoided

Answer 4

excessive economic highs and lows. The fluctuations themselves are unavoidable.

Question 5

designed a theoretical framework the importance of raising government
spending in harsh times and preventing long-lasting depressions.

Answer 5

Keynes (1923)

Question 6

In the next half-century, the ________ followed Keynesian formula and economists refined it developing sophisticated models of fiscal policy and monetary policy.

Answer 6

capitalist system

Question 7

______- expanded with the free market reforms of the American President Ronald Reagan and Margaret Thatcher of the United Kingdom

Answer 7

Neoliberalism

Question 8

considers the long term capacities of a system to exist, not its short-term resistance
to change.

Answer 8

Sustainability

Question 9

is the responsible use of resources, where the present needs are meet, without sacrificing the needs and resources of the future generation.

Answer 9

Sustainability, as defined by the Bruntland Report (World Commission on Environment and Development, 1987) prepared for the United Nations in 1987

Question 10

According to him, it is hard to discern the issue of possible depletion of resources in economic theories, because price mechanisms in market economies would translate scarcity into higher costs and reduced consumption of the good. This explains why more attention was to the problem of what combination of resources could induce growth.

Answer 10

Sebastian (2014)

Question 11

He prophesized on the grim consequences of a rising population which consumes all
surplus food production and thus prevents a rise in living standards.

Answer 11

Malthus (1978)

Question 12

The grim consequences of a rising population which consumes all surplus food production and thus prevents a rise in living standards. The solution was

Answer 12

increased agriculture

Question 13

Increased agriculture culminated for more than two centuries in the Green Revolution in countries such as

Answer 13

India and Bangladesh

Question 14

He analyzed how public goods got exhausted by actors in a free market economy. He argues
non-regulated access to fishery will quickly lead to empty seas and eventually lead to the
collapse of the fishery industry in many countries

Answer 14

Hardin (1968)

Question 15

While in 1972, the _____ published a ground breaking study which agrees with Hardin.

Answer 15

Club of Rome

Question 16

According to Sebastian (2014) there are three areas of economic models that should be rethought and redesigned.

Answer 16

Firstly, the issue of what is an efficient market needs a new explanation.
Secondly, the fact that we must accept that there are many different institutional ways to achieve
and implement an efficient economic systems, but it does not necessarily mean that a country’s
economic system will have the same result to other countries.
Thirdly, redesign on the programs that are designed to achieve economic growth and economic development.

Question 17

are the most fundamental, constructional element of economies

Answer 17

Markets

Question 18

Another strong assumption is that markets always tend to a state of equilibrium controlled by the _________. If there is a situation of imbalance caused by external shocks, these forces push markets automatically towards an efficient equilibrium level of price, no matter what kind of shock caused them

Answer 18

demand and supply

Question 19

The spectacular expansion of globalization, economic reforms in the USA, United Kingdom and Latin America, the collapse of communism created an end of

Answer 19

history atmosphere

Question 20

The neo-liberal agenda brought some problems.

Answer 20

First, it increased exposition of the world
economic systems on crisis and contagion effects. The second problem is efficiency. Poverty trap destroys the capacities of human capital and makes domestic demand unstable. The third problem is the legitimacy of market based solutions. According to Rodrik (2007), market itself is not able to produce legitimacy, but it needs acceptance of all actors

Question 21

The modern capitalism developed in the last 200 years is based on the assumption of growth and expansion. The more products produced, the better for the economy and the people. This is measured by the Gross Domestic Product (GDP) index focusing on the performance of national economies. However, the GDP is not flawless. Its enchanting numbers can show only one dimension of growth, hiding others

Answer 21

The Roll-Over Effect

Question 22

According to him, the search can be speeded up by the economic crisis and cassandric voices that our global economic system is now at the end of its known shape. He also prophesied that the world economy is moving towards a time of a great stagnation. For example, the close-to-recession situation of Japan in 1990 should be perceived as the new normal. There are no low hanging fruits anymore

Answer 22

Cowen (2011)