Unit 3 Notes: Sustainable Prosperity

Vocabulary and key concepts covering the foundations, organizations, challenges, and environmental impacts of economic globalization as outlined in the Unit 3 lecture notes.

Sustainable Prosperity

A state of well-being that includes material wealth as well as social, health, and environmental health, meeting the needs of the present without compromising future generations.

Economic Globalization

The increasing movement of money, people, information, and goods across borders, which helps increase the size and power of transnational corporations.

Laissez Faire

A French term meaning "Let it Be," referring to an economic system based on minimal government intervention in the market.

Law of Self Interest

The first of Adam Smith's three natural laws of economics, suggesting individuals act for their own benefit.

Law of Supply and Demand

The second of Adam Smith's natural laws, stating that prices are determined by the availability of products and the consumer desire for them.

Law of Competition

The third of Adam Smith's natural laws, suggesting that competition between producers keeps the economy healthy and prices fair.

Reparation

The act of making amends for wrongdoing, which may include payments made by a defeated enemy to countries whose territory was damaged during a war.

John Maynard Keynes

An economist who believed unregulated capitalism had failed and that governments should intervene in the economy to create stability and hire the unemployed.

Friedrich Hayek

An opponent of Keynes who mistrusted government control and argued that competition and the free market are essential for a healthy economy.

Milton Friedman

A prominent advocate for free markets who argued that less government control and intervention leads to greater prosperity and individual freedom.

Bretton Woods Conference

A July 1944 meeting of 44 nations in New Hampshire to establish rules and institutions for the post-WWII global economy to prevent economic turmoil.

World Bank

An institution created at Bretton Woods to rebuild Europe after WWII and support long-term economic growth and poverty reduction in poorer countries through loans.

International Monetary Fund (IMF)

An organization created to promote global monetary cooperation, ensure stable exchange rates, and provide financial support to countries in crisis.

GATT (General Agreement on Tariffs and Trade)

An agreement where members agreed to gradually reduce tariffs and trade barriers; it was later replaced by the WTO.

World Trade Organization (WTO)

Formed in 1995, this organization helps conduct business for exporters and importers, resolves trade disputes, and removes tariffs.

Protectionism

The use of government policies such as tariffs, quotas, and subsidies to protect domestic industries from foreign competition.

Tariffs

Taxes placed on imported foreign goods to make them more expensive, thereby encouraging consumers to buy domestic products.

Quotas

Government-imposed limits on the quantity of foreign goods allowed into a country to reduce competition for local industries.

Subsidies

Government support or financial assistance provided to domestic industries to make their goods more competitive.

Trade Deficit

An economic situation that occurs when a country imports more than it exports.

Outsourcing

Hiring workers in another country to perform jobs or services traditionally done domestically, often to lower labour costs.

BRICS

An acronym for the emerging economies of Brazil, Russia, India, China, and South Africa that seek to increase their global influence.

Transnational Corporations (TNCs)

Corporations that operate in more than one country, typically with a head office in a developed nation and subsidiaries in developing countries.

Stewardship

The belief that humans have a responsibility to manage and protect the Earth for the benefit of future generations.

Kyoto Accord / Paris Climate Agreement

International negotiations and agreements aimed at reducing climate change and limiting global warming to $1.5^\circ\text{C}$.

Carbon Tax

An environmental policy where companies and individuals pay a fee for the greenhouse gas emissions they produce.

Cap-and-trade

A system where the government sets a limit on emissions and allows companies to buy and sell permits to emit certain amounts.