Economic Globalization Flashcards

Flashcards about Economic Globalization

Economic Globalization

The integration of the world’s economies and the exchange of goods.

Bretton Woods Agreement

Established a postwar international monetary system of convertible currencies, fixed exchange rates, and free trade.

Fixed Exchange Rate

Value of currency is decided by the government and corresponds to how much gold a country has in their reserves.

Floating Exchange Rate

Value of a currency is decided by how desirable a country’s currency is on the international market (supply and demand).

John Maynard Keynes

Believed governments should play a significant role in managing the economy while still supporting individual enterprise (mixed economy).

Friedrich Hayek

Believed less government involvement in the economy means greater economic freedom and prosperity.

World Bank

Established in 1944 during the Bretton Woods Conference to help Europe recover from the devastation of World War II; today, it provides loans to developing countries.

International Monetary Fund (IMF)

Ensures the stability of the international monetary system by providing financial assistance to countries that are economically unstable.

Structural Adjustments

Economic policies nations must implement to receive funding from the IMF, such as reduction in government spending, privatization, increasing interest rates, and allowing bankruptcy.

World Trade Organization (WTO)

Global international organization dealing with the rules of trade between nations; replaced the General Agreement on Tariffs and Trade (GATT).

European Union (EU)

Economic partnership that allows citizens of member states to move and work freely within the union, promoting workforce diversification and cooperation.

Sustainable Prosperity

Meeting the needs of the current time without compromising the ability of others to meet their needs in the future, balancing limited resources, the environment, and development.

Inflation

A drop of the value of currency when a country has too much debt