Financial Institutions: Lecture

What was a significant economic event in the 1930s that resulted from poor policy decisions?

The Great Depression

What ideology prioritized U.S. domestic interests after WWI?

America First ideology

What was the impact of the Smoot-Hawley Tariffs enacted in 1930?

They protected domestic industries but significantly increased consumer prices and reduced U.S. exports.

What type of trade agreements are characterized by one-sided, non-reciprocal benefits?

Unilateral trade agreements

What are bilateral trade agreements?

Mutually beneficial agreements between two roughly equal economic partners.

What is the purpose of multilateral trade agreements?

To involve multiple countries and aim for broader cooperation.

What trade agreement replaced NAFTA?

The Canada-Mexico-U.S. agreement

What was the Bretton Woods System established for?

To impose order on international trade and monetary policy after WWII.

What were the main objectives of the Bretton Woods System?

To regulate tariffs, currency exchange, and trade rules, providing clarity and fairness in global trade.

How did colonialism influence global trade structures post-WWII?

European imperial powers maximized trade via colonies, restricting rivals' access and providing raw materials at reduced rates.

What are some modern implications of tariffs?

They protect domestic producers but raise consumer costs and have ripple effects on global trade.

What is the significance of the Trans-Pacific trade agreement?

It was designed to balance China's growing trade influence and was impacted by U.S. withdrawal.

What does the African agricultural trade agreement aim to do?

Encourage intra-continental trade by setting clear rules.

What is a key characteristic of tariffs as trade tools?

They can appear protective but often pass costs to consumers.

What was the outcome of retaliatory tariffs during the Great Depression?

They reduced U.S. exports and contributed to a global economic slowdown.

What is the role of modern trade agreements?

To stabilize and organize trade to prevent economic crises.

What is the significance of tariffs in international trade?

Tariffs are taxes imposed on imported goods, affecting trade dynamics and protecting domestic industries.

What characterizes bilateral trade agreements?

Bilateral trade agreements are mutually beneficial agreements between two countries, typically involving equal economic partners.

What is an example of a multilateral trade agreement?

The United States-Mexico-Canada Agreement (USMCA) is an example of a multilateral trade agreement.

What was the impact of the Great Depression on global trade policies?

The Great Depression led to chaotic trade policies and protectionist measures that worsened the global economic situation.

How did the 'America First' movement affect U.S. involvement in World War II?

The 'America First' movement delayed U.S. involvement in World War II due to its focus on national interests over international obligations.

What are the potential consequences of imposing tariffs?

Imposing tariffs can protect domestic industries but may also lead to retaliatory measures and increased prices for consumers.

What role do institutions play in regulating international trade?

Institutions establish agreements and frameworks that govern how international trade is conducted to prevent economic catastrophes.

What is a key feature of multilateral trade agreements like the European Union?

Multilateral trade agreements involve multiple countries working together to establish common trade policies.

How did nationalism affect trade policies in the 1920s and 1930s?

Nationalism led to protectionist policies that disrupted global trade and contributed to the Great Depression.

What is the purpose of tariffs on foreign goods?

To protect domestic industries by making foreign goods more expensive for consumers.

Who are the primary bearers of the cost of tariffs?

Consumers, as they pay higher prices for imported goods.

What historical trade policy did Canada implement from the late 1800s to the 1960s?

A protectionist trade policy to keep foreign goods out and support domestic manufacturers.

What was the impact of tariffs instituted during the Trump presidency?

American consumers paid significantly more for goods due to the tariffs.

What were the Smoot-Hawley tariffs?

Tariffs enacted in 1930 that raised duties on imports and led to increased consumer prices and reduced international trade.

What was a consequence of the U.S. increasing tariffs on imports?

Other countries retaliated by raising their tariffs, leading to a decline in American exports.

How did colonialism influence international trade?

European powers built colonial systems to maximize trade while restricting rivals, extracting resources and depriving competitors.

What was one method used by colonial powers to maintain trade advantages?

Imposing tariffs and economic sanctions against rival nations.

What was the significance of the decline of colonialism after World War II?

It led to new economic structures influenced by the previous colonial trade systems.

What is the purpose of regional trade agreements?

To establish criteria and rules for trade among member countries, promoting economic cooperation.

What challenge did the Trans-Pacific Trade Agreement face?

It was significantly impacted by the withdrawal of the United States.