HGAP Unit 7 Vocab Module 55-57

Import Substitution Industrialization (ISI)

An economic development policy intended to replace imported goods with domestically produced goods as a way to spur industrialization and reduce dependence on other nations

Debt Crisis

Occurs when a government’s debts exceed its tax revenues to the point that it cannot meet its loan payments

Financial Market

Marketplace where financial instruments are traded; stock markets, bond markets, and foreign exchange markets are all financial markets

Trade Embargo

An official ban on trade with a specific country or of a specific good

Organization of the Petroleum Exporting Countries(OPEC)

An intergovernmental organization created to coordinate and unify petroleum policies among member countries

Mercosur

Spanish acronym for the Southern Common Market, a South American customs union that includes Argentina, Brazil, Paraguay, and Uruguay as its full members

Customs Union

A free-trade agreement among two or more member countries, combined with a single, common external trade policy for nonmembers

Tariff

Tax on imported goods and services

Free-Trade Agreement

A treaty between two or more countries that reduces tariffs and promotes foreign investment

World Trade Organization (WTO)

An international organization that regulates trade among 184 member states, providing a framework for negotiating trade agreements and resolving trade disputes

World Bank

An international financial organization that provides funding and expertise to promote sustainable economic growth in developing countries

International Monetary Fund (IMF)

International organization that seeks to foster global monetary cooperation, achieve financial stability, facilitate international trade, and promote sustainable economic growth

Neoliberalism

A range of pro-market and anti-government positions on the economy, such as reducing government ownership and regulation and promoting privatization and market-based solutions

Competitive Advantage

A firm’s relative ability to outperform other transnational corporations (TNCs) in its industry

Transnational Corporation (TNC)

A firm with the power to coordinate and control operations in more than one country, even if it does not own those operations

Complementarity

A measure of how well one country’s export profile matches another country’s import profile

Comparative Advantage

A country’s ability to produce one product much more efficiently than it can produce other products within its economy

Absolute Advantage

A nation’s ability to produce a good or service more efficiently than another nation

Protectionism

Trade rules that restrict imports in order to protect domestic industries

Mercantilism

A theory of trade stating that each country strives to export more than it imports in order to accumulate wealth

Microloans

A very small loan to poor people with little income or collateral intended to help them establish or expand a small business

Gender Parity

A way of documenting progress toward gender equality using measures such as relative access to education, average incomes for women versus men, and workforce participation

Gender Empowerment Measure (GEM)

A measurement of gender equality that includes the proportion of seats held by women in national parliaments, the percentage of women in economic decision-making positions, and women’s versus men’s share of earned income

Income Distribution

How a country’s total GDP is distributed among the individuals in its population

Formal Sector

The part of the economy that is officially recorded with the government

Informal Sector

The part of any economy that is not officially recorded, monitored, or taxed by the government

Human Development Index (HDI)

A statistical measure of human achievement that combines data on life expectancy at birth, education levels, and gross national income (GNI) per capita (purchasing power parity [PPP]) population

Gender Inequality Index (GII)

A statistical measure of gender inequality that combines data on reproductive health, empowerment, and labor-market participation

Purchasing Power Parity (PPP)

Measures how much a common “basket of goods” costs locally in the currency of each country being compared

GDP Per Capita

A country’s GDP divided by its total population

Gross National Income (GNI)

The total income of a country’s residents and businesses, including investment income, regardless of where it was earned, as well as money received from abroad such as foreign investment and development aid

Gross Domestic Product (GDP)

The total value of all goods and services produced within a country over a specific period, regardless of the producer’s national origin

Commodity Dependence

Occurs when commodities account for more than 60 percent of the value of a country’s total exports

Dependency Theory

The theory that the periphery is poor because it was economically dependent on the core in a disadvantageous relationship originally established under colonialism and imperialism

World Systems Theory

Wallerstein’s theory of economic development that regards world history as moving through a series of socioeconomic systems, culminating in the modern world system by about the year 1900

Gross National Product (GNP)

The total value of all the goods and services made by a country’s residents and businesses in a specific time period regardless of the country or location in which they were made