contemprary issues test (10/27/22)

great depression

a severe worldwide economic depression between 1929 and 1939 that began after a major fall in stock prices in the United States.

economic downturn

a general slowdown in economic activity over a sustained period of time.

banking system

a group or network of institutions that provide financial services

economies

the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.

globilazation

the process by which businesses or other organizations develop international influence or start operating on an international scale.

protectionist

an advocate of the policy of shielding a country's domestic industries from foreign competition by taxing imports.

domestic

existing or occurring inside a particular country; not foreign or international.

stock market

a network of stock exchanges where traders and investors buy and sell shares of publicly traded companies.

fascism

a far-right, authoritarian, ultranationalist political ideology and movement

trading bloc

a group of countries that work together to provide special deals for trading

exports

send (goods or services) to another country for sale.

imports

bring (goods or services) into a country from abroad for sale.

market

an area or arena in which commercial dealings are conducted.

IMF, International Monetary Fund

works to achieve sustainable growth and prosperity for all of its 190 member countries

GATT, The General Agreement on Tariffs and Trade

aimed “substantial reduction of tariffs and other trade barriers and the elimination of preferences, on a reciprocal and mutually advantageous basis”, so that the economic recovery after World War II can be boosted. Although the GATT is a legal agreement, it functions as an organization.

tariffs

a tax or duty to be paid on a particular class of imports or exports.

goods

items that add some kind of benefit to the lives of the people who consume them.

comparative advantage

the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity

currency

a system of money in general use in a particular country.

output

to create or manufacture a specific amount

inequality

difference in size, degree, circumstances, etc.; lack of equality.

trade agreement

agreement between two or more countries where the countries agree on certain obligations that affect trade in goods and services,

WTO, World Trade Organization

an international institution that oversees the rules for global trade among nations.

subsidies

a parliamentary grant to the sovereign for state needs.

dumping

a situation of international price discrimination, where the price of a product when sold in the importing country is less than the price of that product in the market of the exporting country.

NGO, Non-governmental organizations

a nonprofit organization that operates independently of any government, typically one whose purpose is to address a social or political issue.

sovereignty

government free from external control

bilateral

having identical parts on each side of an axis

multilateral

having many parts or sides

List three consequences of the global economic crisis that began in 2008.

1) housing market crashed
2) unemploment numbers spiked
3) many bankimg systems crashed

What is protectionism? Why do governments use protectionist policies?

Put up "barriers" to restrict trade, an economic strategy to limit trade. They use these policies to improve economic activity within a domestic economy

what is free trade?

trade without barriers

President Truman and his successors believed that ___________ _____________ was crucial to the
___________________________________________________and the _______.

international trade, health of the US, stability of the west

List four reasons why people trade.

1. differences in technology
2. differences in resource endowments
3. differences in demand
4. the presence of economies of scale

List two effects of economic globalization.

decreases the cost of manufacturing and technological innovation

What is a trade agreement?

a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees.

Give two examples of criticisms of the World Trade Organization (WTO).

1) give more power to the richer countries
2) they do not do enough to in force reducing poverty

NAFTA stands for the:

North America free trade agreement and trades with the U.S., Canada, and Mexico

Explain the difference between protectionism and free trade. Why might governments pursue these
different types of trade policies?

protectionism is to protect a nation's vital economic interests, free trade encourages a higher level of domestic consumption of goods and more efficient use of resources. They do this to help domestic industries.

Why did U.S. leaders change U.S. trade policy after World War II?

They believed it was critical to establish international trade rules that would lead to a steady reduction of barriers to trade.

What is comparative advantage?

the ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.

Give an example of comparative advantage for each of the three categories.

Individual:

Business:

Country:

Individual: A person has a comparative advantage at producing something if he can produce it at lower cost than anyone else.

Business: China's comparative advantage with the United States is in the form of cheap labor.
Country:

What has been the U.S. role in the process of globalization?

America is the world's largest national economy and leading global trader.

What role does the WTO play in international trade?

the World Trade Organization (WTO) is the only international organization dealing with the global rules of trade. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.