Econ Test 4 - Part 2

Front 1

What is the permit raj?

Back 1

the complex system of licences, controls, regulation, and red-tape that influenced economic decisions at all levels of producation, investment, and foreign trade in India's private sector. Businesses needed approval for everything.

Front 2

What was the rejection of international commerce?

Back 2

A mindset of exprort pessimism. India refected foreign trade and fell behind in technology.

Front 3

What are the 3 characteristics of India's self-defeating economic system? What did this lead to?

Back 3

The permit Raj, Bias toward state ownership, and rejection of international commerce. This led to shortages of goods and low quality goods at high prices.

Front 4

What are Non-resident indians (NRI's)?

Back 4

They were poor when they moved to new countries but became successful. They owned 46% percent of motels in the US.

Front 5

Who is Pandit Nehru?

Back 5

Prime Minister of India from it's time of independence until his death.

Front 6

Who is Indira Gandhi?

Back 6

daughter of Pandit Nehru, was prime minister for 15 years and assassinated while in office.

Front 7

Who is Rajiv Gandhi?

Back 7

Son of Indira Gandhi, prime minister after his mother died until he was assassinated by a tamil Tiger suicide bomber while compaigning for a political comeback.

Front 8

Who is P.V. Narasimha Rao?

Back 8

Prime minister in India, active in the Indian Independence movement, previously held political cabinet positions under both Gandhi's, so continued the Gandhi dynasty.

Front 9

Who is Manmohan Singh?

Back 9

An economist who served as Finance Minister of India under Rao and is currently the Prime Minister of India; played a central role in instituting economic reform under Rao, with a focus on Macroecon issues.

Front 10

Who is Palaniappan Chidambaram?

Back 10

A lawyer and businessman who served as minister of state in the indian ministry of commerce under Rao and played a cnetral role in reforming trade policy and reducing license/permits

Front 11

What is the impact of Collapse of Soviet Union in 1991?

Back 11

It sent shock waves throughout the world and India: notion of "Central planning" was shattered; the end of a role model for india; the collapse of India's largest trading partner

Front 12

Who is Atal Behari Varpayee?

Back 12

Prime minister of India; a member of the Bharatiya Janata Party.

Front 13

What is Bharatiya Janata Party (BJP)?

Back 13

An indian political party with a platform of supporting continued market based economy, a nationalist based foreign policy agenda, a strong national defence, and hindu nationalism (rolling back minority privileges in favor of Hindu majority)

Front 14

What were the 4 economic reforms under Prime Minister Vajpayee?

Back 14

1. Quantitative restrictions on myore than 300 imported items lifted, facilitating greater international trade. 2. Limit on foreign direct investment in an enterprise raised to 40%. 3. Favorable tax incentives enacted, in order to attract venture capital. 4. Further dismantling of the Permit Raj (simplifiy tax procedures)

Front 15

What is foreign Direct Investment?

Back 15

a cross-border investment made by an investor wih an intention of establishing a lasting, long-term financial interest in an enterprise in a foreign country and exerting a degree of influence on that enterprise's operations

Front 16

What does Bangladore symbolize in India?

Back 16

India's new engagement with the world economy and known as India's silicon valley because of it's emphasis on high tech related jobs.It is the 3rd largest city in India.

Front 17

What is the emphasis in Bangladore?

Back 17

Education, and reserach and development under Nehru. It established the Indian Institute of Technology.

Front 18

What advantage does Bangladore have for Americans?

Back 18

Because of the 9-12 hour time difference, a US company with an office in Bangladore could easily provide customers with 24 hour customersupport.

Front 19

What is the Indian Elephant?

Back 19

the economy of India has not emerged like a dragon (like China) or a Tiger (like south korea and Taiwan); the proper zoological refernce is to an elephant - slow to rise and get up to speed, but once in mtion, fast and steady, moving through thicket after thicket.

Front 20

What is the current population of India? What percentage?

Back 20

1.14 billion, 17.2% of the world's population

Front 21

During the period of 1947 - 1991, what did India do?

Back 21

Rejected foreign trade and foreign investment, essentaially excluding themesevles from the emerging global economy.

Front 22

Which of the following is not considered part of the nehru-gandhi political dynasty? Pandit Nehru, Mahatma Gandhi, Indira Gandhi, or P.V. Rao

Back 22

Mahatma Gandhi.

Front 23

Who is currently the Prime Minister of India?

Back 23

Manmaohan Singh

Front 24

What is not supported by the Bharatiya Janta Party (BJP)?

Back 24

reducing India's overall defense budget and eliminating their nuclear weapons program.

Front 25

What is shock therapy?

Back 25

A rapid movement to a market economy, characterized by an immediate elimation of price and currency controls, state subsidies to enterprises, and trade restrictions.

Front 26

Who is Jeffery Sachs?

Back 26

Columbia University Economist; advisor to numerous gov in Latin America during times of reform. He advocated shock therapy as opposed to gradualism.

Front 27

Where did the end of communism begin? Who was te central figure behind the reform there?

Back 27

Poland. Lech Walesa - a polish labor leader, co-founder of solidarity; won Nobel Peace Priza; president of poland.

Front 28

What is soliditary?

Back 28

trade union federation; first independent trade union in a soviet-bloc country; membership peaked at 10 miilion; gained political control in semi-free elections.

Front 29

What is the Balcerowicz group?

Back 29

Group of Polish economists led by Balcerowicz concerned with analyzing the probelms of socialism and questions of how to reform the polish economy - they supported shock therapy, not gradualism.

Front 30

What is the Sachs/Balcerowicz shock therapy plan?

Back 30

Price controls were lifted, tax structure was reformed, and currency devalued and switched to floating exchange rate. Markets began to work in one month - shortages disapeared, goods returned to markets, prices came down.

Front 31

What is Velvet Revolution?

Back 31

The non-violent revolution in Czechsolovakia that led to the overthrwo of the communist government; countr would split into two independent republics (Czach and Slovak)

Front 32

What happened when the shock therapy was applied in Czechoslovakia?

Back 32

Policies were similar from Poland; inital inflation, followed by a quick stabliziation of markets and strong economic growth.

Front 33

What was the post-reform economic performacne of Czech republic?

Back 33

relatively little trouble returning to the market.

Front 34

What was the Soviet Command Economy?

Back 34

Gov controlled the entire ecconomy.

Front 35

What did Gosplan do?

Back 35

determined the overall economic plan.

Front 36

What does Gos stand for in Russia?

Back 36

It's the abbreviation for Government.

Front 37

What did Gosten do?

Back 37

Set prices.

Front 38

What did Gossnab do?

Back 38

Allocated producative resources.

Front 39

What did Gostrud do?

Back 39

Established labor and wage policies.

Front 40

What did gosbank do?

Back 40

It was the central bank and the only bank at all.

Front 41

Who was Mikhail Gorbachev?

Back 41

Leader of the USSR who promoted reform. Instituted perestrokia (restructuring) and glasnot (openess). He aimed to modify a solicist economy but didn't want to shift toward a true market economy. He failed. Dismantled machinery of central planning but replaced it with nothing.

Front 42

What is gaidar reforms?

Back 42

New phase of economic reform launched by Yeltsin; Russia's version of "shock therapy"

Front 43

What were the 4 primary components of Gaidar reform?

Back 43

1. Market liberalization - create funcioning markets (allowing free entr to markets, decreasing share of output, establishing legal sysem to support market activity). 2. Privatization - of state owned enterprises to encrease their efficiency, reduce fiscal burden of state subsidization, and make economic reform irreversable. 3. Constructing a social security system - previously no unemployment compensation. 4. Converting defense sector - over 30% of GDP was devoted to national defense, needed to focus on other important resources (like toothpaste!)

Front 44

What were 3 distinct privatization programs in Russia?

Back 44

small-scale privatization; voucher privatization; and privatization for cash.

Front 45

What is small-scale privatization?

Back 45

transfer of small shops, usually to current managers, apartments sold to current occupants.

Front 46

What is Voucher Privatization Program?

Back 46

Privatization of large-scale industry through auctions. Vouchers were given to all Russian citizens (and children) for a small fee. They could then be exchanged for ownership claims in enterprises through auction mechanisms. A market for vouchers emergend - in the end it was a much more narrow group of insiders creating a class of welathy tycoons.

Front 47

What is privatizaion for cash?

Back 47

The Russian gov shifted focus to this to dispose of remaining assets (utilities, natural resources, high-tech defense enterprises.)

Front 48

What is Loans-for-share?

Back 48

Program under which gov used shares in public enterprises as collateral for loans from private sector with no intention of ever repaing loans.

Front 49

What was the primary motivation for loans-for-shares?

Back 49

Solidify support for Yeltsin for the election

Front 50

What is the post-reform economic performance of russia?

Back 50

sharp decline in econ output after breakup of USSR. Industrial output fell almost 60% in 4 years. Ratio between wealthy and poor increased from 2.8 to 7.5 in 7 years. Inflation still high.