Sociology 2: Midterm Review Sheet

The midterm may cover all in-class material and readings since the beginning of the semester. The list of major ideas and concepts, below, is a guide to focus your study on important topics that are most likely to be on the exam. However, the exam may not be limited solely to these topics. Midterm answers that draw explicitly on examples and ideas from readings (in addition to lecture) will be rewarded.

Midterm format:

My midterm exams typically consist of: 1) several very short questions: either multiple choice, true/false, or 1-2 sentence written answers; 2) several mid-length questions: 4-6 sentence written answers; and 3) one longer question: 2 pages (8.5x11) written answer. Note: This is just a general guideline. I sometimes make changes to the format (e.g., changing question length, or using more short questions and fewer long ones).

I. States and Markets –

Contrasting ideals: Keynesianism/socialism vs. free market capitalism

-- Understand main differences in terms of state policy

-- Understand advantages and disadvantages of each (tradeoffs)

Gross Domestic Product (GDP)

Economic growth, recession, depression; Budget surplus/deficit

Sources of economic growth (short-term and long-term)

Requisites of market capitalism (private property, laws, infrastructure, etc)

Ways that states affect markets (be able to discuss and come up with examples):

Fiscal policy

Monetary policy -- also: The “Fed”, interest rates, stimulus/expansion vs. contraction

Regulation -- also: subsidies, wage and price controls

Direct ownership of production -- also: nationalization, privatization, Reagan/Thatcher

Understand effects of changes in taxes/spending and interest rates on economic growth

II. Economic Globalization

The “golden straightjacket” (Friedman)

“Old” globalization vs. new (Elwood Ch 1)

Factors enabling economic globalization

Know what things are more globalized (ex: capital flows) and what is less (ex: labor)

Containerized shipping

International capital flows (also called: financial flows)

Foreign Direct Investment (FDI)

Investors (examples include pension funds -- CalPERS, LTCM; also: “electronic herd”)

International financial systems: Gold standard; Bretton Woods; Floating exchange rates

Things that affect currency values (lecture)

-- Understand relationship between trade/capital flows and currency values

Understand who gains, who loses from changes in currency values

Asian financial crisis (Commanding Heights; lecture; Elwood Ch 1, 5)

-- also: Contagion; Pinball Capital

Other negative aspects of globalization: environmental degradation, etc.

Trade -- also: reasons nations trade; winners and losers

Krugman’s 5 misconceptions about trade

Krugman’s argument that trade between rich & poor countries produces losers

(New York Times article)

Stiglitz’s 5 recommendations to make trade fair

Barriers to trade/investment -- also: tariffs, quotas, capital controls, etc.

Free Trade Agreements

NAFTA; Consequences (Stiglitz Ch 3; Schaeffer “winners & losers”)

GATT; WTO, criticisms of trade negotiations (Stiglitz Ch 3, WTO handout)

Multinational corporations

-- Stiglitz’s 5 recommendations to reduce MNC abuses

“Untouchables” (Friedman)

Elwood’s 4 recommendations to improve the global economy

-- also: Tax on financial speculation

Effect of globalization on government autonomy (Brawley; lecture)