International Economics Review

Vocabulary flashcards for international economics exam review.

Transnational Corporations (TNCs)

Firms that operate across multiple countries, influencing global trade, investment, and labor markets.

Outsourcing

Contracting work to an external company, which may be domestic or international.

Off-shoring

Moving business processes or production to another country to reduce costs, whether in-house or outsourced.

NAFTA (now USMCA)

A trade agreement between the U.S., Mexico, and Canada aimed at reducing tariffs and trade barriers.

Regional Trade Agreements (RTAs)

Agreements between countries in the same region to encourage trade and economic integration by reducing restrictions.

GDP (Gross Domestic Product)

The total economic output of a country in a year.

Unemployment Rate

The percentage of the labor force actively seeking work but unable to find jobs.

Inflation

The rate at which general prices for goods and services increase over time, typically measured by the CPI (Consumer Price Index).

Hyperinflation

Extremely rapid and out-of-control inflation, often above 50% per month, undermining a currency’s value.

Deficit

The gap in a single year when a government spends more than it earns in revenue.

Debt

The accumulation of all past deficits, representing the total amount a government owes.

Human Development Index (HDI)

A UN metric combining life expectancy, education level, and per capita income to assess a country’s social and economic development.

Latin American Debt Crisis

A financial crisis in the 1980s when many Latin American nations defaulted on loans due to high interest rates and falling commodity prices.

Washington Consensus

A set of free-market policy reforms promoted by the IMF and World Bank in the 1980s–90s for developing countries.

Rodrik’s Conflict Diagnostics Method

A development approach that identifies the most binding constraint preventing economic growth in a country.

Lebanon’s Crisis / IMF

Severe economic and financial collapse in Lebanon characterized by currency devaluation and soaring inflation.

2008 Global Financial Crisis

Began in the U.S. with a collapse of the housing market and subprime mortgage failures, leading to banking and liquidity issues worldwide.

Sources of GFC Globaloney

Term critiques oversimplified narratives attributing the Global Financial Crisis solely to globalization.

Specie Currency

Money based on precious metals, valued for its material worth.

Fiat Currency

Fiat currency is paper money, like the U.S. dollar, that’s used because people trust the government behind it. It has no value on its own, but it works because everyone agrees to accept it.

Hard Currency

stable money like the U.S. dollar that people and countries prefer to use for trade or saving.

Soft Currency

Less stable money that fluctuates in value, often from emerging markets, making international transactions more risky.

Mundell’s Trilemma

Mundell’s Trilemma (also called the Impossible Trinity) is an economic theory that says a country can only have two out of three of these goals at the same time:

1. Free capital movement (money can flow in and out freely)

2. A fixed exchange rate (the currency’s value stays stable)

3. An independent monetary policy (control over interest rates to manage the economy)

Global Inequality and Poverty

The uneven distribution of wealth, resources, and opportunities across countries and populations.

UN Millennium Development Goals (MDGs)

A set of eight targets established in 2000 by the United Nations, aimed at reducing extreme poverty and improving education and health by 2015.

Sustainable Development Goals (SDGs)

A set of 17 interlinked targets adopted in 2015 that aim to address a broader range of social, economic, and environmental issues by 2030.

Hegemony Theory

Explains how one country can shape international norms, economic policies, and cultural practices to maintain dominance.