The Global Economy

Question 1

A large part of contemporary global economy can be traced back to the _______________ when delegates from different states, including the Philippines, gathered to plan for the global economy post-World War II

Answer 1

Bretton Woods Conference

Question 2

Purpose of the Bretton Woods Conference, or the International Monetary and Financial Conference:

Answer 2

• To set up a stable monetary system
• To promote free trade
• To support economic recovery from war

Question 3

It eventually led to the creation of three multilateral institutions:

Answer 3

• IMF
• World Bank
• GATT

Question 4

promotes international financial stability and monetary cooperation

Answer 4

International Monetary Fund

Question 5

facilitates international trade, promotes employment and sustainable economic growth, and helps to reduce global poverty

Answer 5

International Monetary Fund

Question 6

Seeks to end extreme poverty and promote shared development in a sustainable way

Answer 6

World Bank

Question 7

Engages the development community with real-world statistics, and supports countries’ poverty reduction strategies

Answer 7

World Bank

Question 8

Delegates during the Bretton Woods Conference initially planned to design a postwar trading system that would parallel the international monetary system facilitated by the IMF, but this did
not materialize

Answer 8

General Agreement on Tariffs and Trade

Question 9

market-oriented

Answer 9

liberal policies

Question 10

restrict international trade

Answer 10

protectionist policies

Question 11

The Uruguay Round, a new round of trade negotiations, is launched; culminates in 1994 Treaty that establishes the

Answer 11

World Trade Organization

Question 12

– Administers WTO trade agreements
– Serves as forum for trade negotiations
– Handles trade disputes
– Monitors national trade policies
– Provides technical assistance and training for developing
countries
– Fosters cooperation with other international organizations

Answer 12

World Trade Organization

Question 13

International trade has increased dramatically due to elimination and/or reduction of restrictions such as

Answer 13

tariffs

Question 14

applies also to trade in services, investment measures, property rights

Answer 14

World Trade Organization

Question 15

has faster and more automatic dispute settlement mechanism less prone to blockages compared to the old GATT system

Answer 15

World Trade Organization

Question 16

are organizations that own or control overseas companies or production or service facilities in one or more countries other than the home country; also called
transnational companies (TNCs)

Answer 16

Multinational Corporations (MNCs)

Question 17

entry into a business enterprise in one
country by an entity based in another country

Answer 17

Foreign direct investment

Question 18

investment on securities (as stocks and
bonds) in a host country

Answer 18

Portfolio investment

Question 19

Two theories provide an explanation on the causes of contemporary economic globalization:

Answer 19

1. Hegemonic stability theory
2. Neo-liberal institutionalism

Question 20

– Argues that today’s economic globalization could be largely traced back to US-led postwar efforts.
– Maintains that the US had a preponderance of power to shape a
liberal global economy, and it had the willingness to act.
– Is based on the idea that powerful states, that is hegemons, shape international economic order, in the same manner that
the UK did during the Pax Britannica.

Answer 20

Hegemonic stability theory

Question 21

– Underscores the essential role of liberal international
institutions.
– Contends that international institutions, such as the IMF, World
Bank, and the GATT, have an independent impact on the global
economy
– Holds that the governing arrangements these institutions provide
create regularity in actors’ behavior and expectations.

Answer 21

Neo-liberal institutionalism