APHUG Unit 7

terms marked with * are not vocab terms from textbook

Industrial Revolution

rapid transformation of economy thru introduction of machines, new power sources & chemical processes in Europe & U.S. around late 18th century

textile

fabric woven from wool, cotton or flax fibers

labor productivity

average amount of goods & services produced per worker per unit of time

fossil fuels

natural fuels derived from fossilized remains of living organisms

crude oil

yellow-black liquid fossil fuel found in geologic deposits

mass consumption

purchase of large amounts of mass-produced goods by large amounts of ppl

international division of labor

situation where differing regional labor forces complement each other in interdependent global economy

commercial farmers

farmers that raise crops & livestock to sell @ market for profit

wage labor

socioeconomic relationship where employers pay workers to do a task

working class

ppl who depend on wage labor to obtain basic necessities

capitalist class

ppl who own means of production & pay wages of workers

middle class

ppl either salaried professionals or office wage workers

labor unions

associations of workers in particular industries established to collectively bargain w/ capitalists

mass production

machine manufacture of identical products in large quantities

assembly line

system of manufacturing where parts & procedures are added one step at a time thru series of workstations

economic sectors

groupings of industries based on what’s produced & activities of workforce

primary sector

industries that extract natural resources from environment

e.g. fishing

secondary sector

process raw materials extracted by primary sector, transforming into finished & usable forms

e.g. milling logs into lumber

tertiary sector

provide services to businesses & consumers

e.g. lawyers

quaternary sector

provides intellectual & informational services

e.g. biomedical research

quinary sector

highest-level management decisions are made in areas of business, gov’t, education, science

e.g. CEO

base industry

disportionate economic importance & whose existence other industries depend on

semi-periphery

countries or regions whose economics have elements of both core & periphery

containerization

system of cargo transport that is compatible w/ different transport options using shipping containers

break-of-bulk point

location where bulk cargo is transferred from one mode of transportation to another

least-cost theory

Alfred Weber’s theory that transportation costs & labor costs play strong role in determining location of manufacturing cities

Weber’s location triangle*

if material is heavier, manufacturing locations = closer to raw materials & vice versa

Rostow’s stages of economic growth*

suggests all countries eventually progress similarly thru 5 development stages

ending in wealthy, mass-consumption societies

progression of Rostow’s stages of economic growth*

- 1st stage based on subsistence agriculture

- followed by increasingly industrialized & economically diverse stages

- 5th stage based on mass consumption & service sector becomes dominant

world systems theory

Wallerstein’s theory of economic development grouping countries into core, semi-periphery or periphery

dependency theory

states periphery is poor bc of economic dependence on core in unequal relationship established from colonialism & imperialism

commodity dependence

occurs when commodities account for more than 60% of value of country’s total exports

gross national product (GNP)

total value of all goods & services made by country’s residents & businesses in a specific time period

gross domestic product (GDP)

total value of all goods & services produced within a country over specific time period

gross national income (GNI)

total income of country’s residents & businesses, regardless of where it was earned & aid received from abroad

GDP per capita

country’s GDP divided by total population

purchasing power parity (PPP)

measures how much a common “basket of goods” costs locally in the currency of each country being compared

Gender Inequality Index (GII)

statistical measure of gender Inequality combining data on reproductive health, empowerment, labor-market participation

Human Development Index (HDI)

statistical measure of human achievement combining data on life expectancy at birth, education levels & GNI per capita

informal sector

part of any economy not officially reported to gov’t

formal sector

part of any economy officially reported to gov’t

Gender Empowerment Measure (GEM)

measurement of gender equality including proportion of seats held by women in parliament, percent of women in economic law making positions & women vs. men’s share of earned income

gender parity

way of documenting progress toward gender equality using access to education, average incomes for women vs. men & workforce participation

microloan

very small loan to poor ppl w/ little income or collateral, intended to help them establish or expand small business

mercantilism

theory of trade stating each country strives to export more than it imports to accumulate wealth

protectionism

trade rules that restrict imports to protect domestic industries, central to mercantilism

absolute advantage

nation’s ability to produce goods or services more efficiently than other nations

comparative advantage

country’s ability to produce one product more efficiently than it can produce other products

complementarity

measure of how well a country’s export profile matches another country’s import profile

transnational corporation (TNC)

firm w/ power to coordinate & control operations domestically & internationally

e.g. Toyota

competitive advantage

firm’s relative ability to outperform other TNCs in its industry

neoliberalism

range of pro-market & anti-gov’t stances on economy

International Monetary Fund

international organization seeking to promote global economic cooperation, financial stability & sustainable economic growth

World Bank

provides funding & expertise to promote sustainable economic growth in developing countries

World Trade Organization

regulates trade and encourages global trade cooperation

free-trade agreement

treaty btwn 2 or more countries that reduce tariffs & promotes foreign investment

tariffs

tax on imported goods & services

customs union

free-trade agreement among 2 or more member countries + combined w/ common external trade policy for nonmembers

Mercosur

South American customs union including Argentina, Brazil, Paraguay, Uruguay

Organization of the Petroleum Exporting Countries (OPEC)

intergovernmental organization created to coordinate & unify petroleum policies among members

trade embargo

official ban on trade on specific country or good

financial market

any marketplace where financial products are traded

debt crisis

occurs when gov’t debts exceed its tax revenues where it cannot meet loan payments

import substitution industrialization (ISI)

economic development policy w/ goal of replacing imported goods w/ domestically produced goods to spur industrialization & reduce dependence on other countries

Fordism

economic & social arrangement based on mass production, mass consumption and high factory employment

corporate disinvestment

process where companies stop investing in factory upgrades & begin selling off assets

offshoring

relocation of manufacturing & support services from one country to another

outsourcing

transfer of part of a firm’s internal operations to 3rd party

deindustrialization

decline of employment in manufacturing sector in core’s industrial centers

special economic zones (SEZ)

specific area within country’s borders where business & trade laws are different than rest of country

new international division of labor

spatial shift in manufacturing from developed to developing countries

export processing zones (EPZ)

industrial zone w/ incentives to attract foreign investment where imported materials are processed or assembled before getting re-exported

free-trade zones (FTZ)

specially designated duty-free area that provides warehousing storage & distribution facilities for goods intended for trade or reexport

post-Fordism

shifts from manufacturing centers & mass production to more flexible production processes

e.g. specialized batch production

just-in-time-manufacturing (JIT)

production in small batches as needed by customer demand

high-technology industry

industry that uses most advanced technology & has highest levels of research/development

e.g. aerospace

agglomeration economy

occurs where firms cluster together in a place for its geographic concentration of skilled labor & those involved in the industry

e.g. Silicon Valley

multiplier effect

creation of new business & jobs in other industries from investment in a different industry

growth poles

geographically identifiable centers of economic activity organized around designated industry

sustainable development

meets consumption needs without compromising ability of future generations to meet their own

resource depletion

consumption of natural resources faster than they can be replenished

environmental pollution

contamination of physical & biological parts of environment

point source pollution

identifiable source of where contaminants come from

nonpoint source pollution

contamination coming from multiple, spread out sources

climate change

long-term shift in global or regional climate patterns

cogeneration

production of 2 forms of energy from 1 fuel

carbon neutrality

achieving zero CO2 releases thru emissions reduction & carbon removal

carbon offsets

processes that remove or store carbon from atmosphere to make up for CO2 emissions elsewhere

ecotourism

travel to natural areas of ecological value in support of conservation efforts & socially just economic development