AMSCO AP Human Geography - 7.6: Trade and the World Economy

Trade

The exchange of goods and services between countries or regions, which can involve imports and exports and is essential for economic growth. It occurs when one party desires a good that another country has.

Barter

A system of exchange where goods and services are traded directly for other goods and services without using money.

Comparative advantage

The ability to produce a good at a lower price than other competitors. China can manufacture goods at a lower price due to their worker’s lower wages

Complementarity

When a country has the income, goods, or services that another country desires.

Free trade policies

are regulations that reduce the barriers to trade by allowing international trade without tariffs or other trade barriers, promoting economic integration and competition.

Neoliberal policies

Policies that reduce government regulations and taxation. In the 1980s, Ronald Reagan and Margaret Thatcher were advocates for neoliberalism.

What are some efforts by the government to promote economic growth?

Tax breaks, Loans, Direct Assistance, Tariffs, and Changes in Regulation.

Trading blocs

are groups of countries that agree to a common rules and form a partnership to increase trade among themselves, typically by reducing tariffs and other trade barriers.

World Trade Organization (WTO)

An international organization that regulates trade between nations, aiming to ensure that trade flows as smoothly, predictably, and freely as possible.

International Monetary Fund (IMF)

An organization that works to promote global economic stability and growth, providing financial assistance and advice to member countries facing economic difficulties.

Mercosur

A South American trade bloc formed to promote free trade and economic integration among its member countries, primarily including Argentina, Brazil, Paraguay, and Uruguay.