Exercise 2. A)Please decide whether the following statements are correct or not.

A) Please decide whether the following statements are correct or not.

Q1: The USA was characterised by huge trade deficits in the last quarter of the 20th century. C

Q2: A relatively low savings rate (as compared to the investment rate) may trigger a trade surplus in any country. I

Q3: While the standard of living of most American workers before the 1970s grew steadily, the growth rate decelerated significantly in the following decades. C

Q4: According to the critics of globalisation, globalisation increased the immigration of workers from poor countries. C

Q5: According to the critics of globalisation, globalisation increased the immigration of workers from poor countries, thereby increasing the standard of living of domestic workers. I

Q6: According to economists, technological advances decreased substantially the demand for low-skilled labour in the U.S. economy. C

Q7: As a consequence of technological change, the demand for skilled, educated labour did not increase either, because computer technology made labour redundant. I

Q8: Nowadays, industrialised nations are shifting from unskilled, labour-intensive industries to service industries. C

B) Multiple choice questions (only one correct answer exists).

Q 1: To what factors can the U.S. deficit be traced? (p. 203)

(a) trade

(b) competitive factors

(c) macroeconomic factors

(d) industrial factors

Q2: Specifically, what kind of macroeconomic factors can be responsible for the huge trade deficit of the USA? (p. 203)

(a) low rate of inflation

(b) low rate of unemployment

(c) low rate of savings

(d) low rate of economic growth

Q3: In general, a trade surplus is due to (p. 203)

(a) a country’s relatively high savings rate as compared to its investment rate.

(b) a country’s relatively low savings rate as compared to its investment rate.

(c) a country’s relatively high investment rate.

(d) a country’s high savings rate.

Q4: Which of the following characterised the U.S. between 1973 and the mid-90s? (p. 203)

(a) The growth rate of income inequality slowed and national income increased.

(b) The growth rate of national unemployment slowed and income decreased.

(c) The growth rate of national income increased and income inequality decreased.

(d) The growth rate of national income slowed and income inequality increased.

Q5: What happened in 1973?

(a) The first oil crisis.

(b) The establishment of the GATT.

(c) The creation of the EEC.

(d) The end of the Suez Crisis.

Q6: Which segment of the American society was hit the most by the increased inequality? (p. 203)

(a) unskilled workers

(b) teachers

(c) IT employees

(d) skilled workers

Q7: To which factors did American economists attribute the relative decline in the wages of low-skilled American labour? (p. 204)

(a) To the immigration of foreign, poor workers.

(b) To brain drain.

(c) To technological changes.

(d) To increased global competition.

Q8: What type of technological advances contributed to the relative decline in the wages of low-skilled workers? (p. 204)

(a) brain drain

(b) computer and information technology

(c) industrialisation

(d) advanced agricultural technology

Q9: Structural change means… (p. 304)

(a) a shift from skilled, white-collar industries to service industries.

(b) a shift from low-skilled, blue-collar industries to service industries.

(c) a shift from low-skilled, blue-collar services to industries.

(d) a change from skilled, blue-collar industries to service industries.

Q10: What consequences arose from the establishment of the NAFTA? (p. 206)

(a) It has redistributed jobs.

(b) It has redistributed incomes.

(c) It has reduced jobs.

(d) It has caused unemployment.

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