ECO2121B – Economics of Globalization

Subject: Economics / General Economics
ECO2121B: Economics of Globalization
Winter 2017
Second Practice Question Set
1. Evaluate Canada role in globalization? How has its role been changing over time?

2. What has caused the financial crisis in the US? What made it spread around the globe? What
and how much have been the real cost of it? What do you see the way out?

3. What is welfare state? What are the main policy dilemmas for welfare state? Has
globalization limited the role of a nation in terms of choosing independent policies? Are
national governments withering away?

4. What is public debt and what are its implications?

5. In a small economy with perfect capital mobility show how supply of and demand for
loanable funds and foreign currency markets are related and reach into equilibrium?

6. What is saving glut? Show diagrammatically as well. How is it affecting the world?

7. How have income and wealth inequality in the world? Do you see globalization both as a
cause and also as a remedy for the rising inequalities?

8. Using two-country model show that as long as there are technological differences between
countries, labor mobility is beneficial for the world. Decompose the benefits to immigrants
host country and to the immigrants. What drives net benefits in this model?

9. What are the pros and cons of globalization? How can a country prepare for it? What needs
Canada to do to benefit from the globalization?

10. What are the potential channels of positive effect of globalization? What has been the impact
of developing countries in globalization? How has globalization affected the poverty and
income inequality?

11. How can globalization help a country to get higher economic growth?

12. What is international capital market? Who are the players and what is their role in

13. What is offshore banking? How do they contribute to globalization?

14. How can government safeguard against financial instability? What are the difficulties in
doing so in international banking?

15. What are a country’s macroeconomic goals? Why economists see more role of fiscal policy
when the interest rates are close to zero? What policies are used to attain it and why it wold
be better to have policy coordination?

16. What is optimal currency area? And what are the constraints it imposes to a country’s
adjustment to shocks?

17. How do you see the relationship between trade and environment? How do you relate
Kutzent curve with international trade for developing countries?

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