Sociology 2: Midterm Review Sheet

The midterm may cover all in-class material, video, and readings since the beginning of the semester. The exam is closed-book, closed-notes. You do not need to bring a blue book. The exam is designed to be completed within the normal class period.

Topics covered:

All required readings from weeks 1-5

Video: Commanding Heights, Episodes 1 and 3

All lectures from weeks 1-5

Midterm format:

The midterm exam will 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) I sometimes include one somewhat longer written answer (1 page or more). To get an idea of the length, one previous exam included 8 short questions, 3 mid-length questions, and 1 long question. I revise the exam each year, however, so your exam may be different in the total number of questions, or the number of each particular type of question.

Review Topics

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, videos, and lectures will be rewarded.

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

Supercapitalism (Reich)

-- The “Not quite golden age”; changes that created Supercapitalism (new technologies/global supply chains; deregulation)

II. Economic Globalization

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

Factors enabling economic globalization

Global supply chain

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

Containerized shipping

“Untouchables” (Friedman)

International capital flows (also called: financial flows)

Foreign Direct Investment (FDI)

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

The “golden straightjacket” (Friedman)

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

Multinational corporations

-- Stiglitz’s 5 recommendations to reduce MNC abuses

Things that affect currency values (lecture)

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

-- Strategic manipulation of currency values (China) (Krugman article)

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. (Elwood)

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

Krugman’s 5 misconceptions about trade

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)

Elwood’s 4 recommendations to improve the global economy

-- also: Tax on financial speculation (aka “Tobin tax”)

Brawley’s overview of the effect of economic globalization on politics:

-- Domestic becomes international and vice versa; Domestic politics shrinks (echoing “golden straightjacket” & supercapitalism); Local coalitions shift; etc.

Greico & Ikenberry’s overview: Economic globalization and national economic welfare

-- risk of external shocks; growing income inequality; “golden straightjacket”, “race to the bottom”; effects on national cultural autonomy

Advice:

Show off your knowledge. Provide detail, examples, and references to readings or lecture if you can think of them. Rich and detailed answers will score more (and are much more likely to earn partial credit even if you make mistakes).

Try not to leave anything blank. It is better to write a partial answer than nothing at all. We try to give partial credit whenever possible.