D270 Final Quizlet Garcia

What are the three types of economic systems?

command, market, mixed

What are the three BRIC countries

Brazil, Russia, India and China

What economic system did the Republicans used to abide by?

Market but now shifting toward mixed due to tarrifs

Define Mixed Economy

Gov and private ownership mixed in allocating economic resources, optimizes efficiency, happens in mostly free countries, 2nd most productive type behind market and preempts self interest

Economic Freedom index

Has twelve key areas and higher the score the better

Relationship between Economic Freedom and Income

The greater the Economic Freedom, the higher per capita income

What has happened in the past two years with Economic Freedom?

The world's EF has gone up, while the US's EF has gone down

Out of the six counties we studied, which one had the highest economic freedom and the lowest economic freedom?

Australia and India

What are other positives to High economic freedom

Low inflation and low unemployment

Chapter 4 case 2: What will the developed countries in the West do with the changing business world?

major generational shifts, AI is becoming more important , 4th industrial revolution makes major shifts in generations

What did Garcia say was the best type of government for an economic system?

A benevolent dictatorship then goes to a democracy since it works in the short term and can make changes very quickly

Challenges in emerging economies

Government control, corruption, volatility and efficient channels (economic conditions)

Reasons for Economic Indexs

Complexity, dynamism, interdependence and overload

What is GNI?

Market value of final goods/services and domestic owned factors of production

What is desirable for potential when looking at GNI and GDP?

High pop and high per capita

What is GDP?

Focuses on things produced within the countries borders

What type of countries produce more GDP than GNI?

Small countries bring in more than they send out and countries with a lot of banks results in this

What is purchasing power parity?

the rate of conversion of one country's currency to purchase the same goods in another country

Which countries tend to have higher PPP?

Inexpensive countries

What do G7 countries have in common?

Very high human development index, advanced economies and top 15 for per capita

What is BME?

Large pop and large economies see them as threat since they have massive infrastructure, tech leaders and growth spillover

What was Smoot-Hartley's impact?

It was a agricultural tariff that resulted in more tariffs and international trade went down

US and Vietnam case

US catfish guys complained that Vietnamese catfish took away their profits and accused them of price dumping. Tried to get the catfish out of US market but US gov was afraid to do anything drastic that would damage international relations or Vietnam would counter with tariff on US beef

Chapter 4 Case 1: What was the point?

Large economies in 2050 will be in Asia, G-7 and G-20, power from wealthier countries to emerging countries and wealthy countries want to restore their former powers, reducing state authority to raise economies hurts developing economies

Four big interpretations to determine a countries economic environment

1) Type of economic Environment

2) Degree of Economic Freedom

3) Drivers of Economic Performance

4)Orientation of Economic Success

Define Developed Economies

Stable institutions, high EF, advanced tech, lots of infrastructure, 16% of world's pop lives here, trend is to send manufacturing to a lower cost , high productive factory in a developing country

Define Developing Economies

Uneven Economic environment, resist foreign ownership, low EF, sketchy tech, corruption high, hard to live daily lives and 84% of pop lives here

What is the base of the pyramid?

spotlights the 4 billion people at the bottom, who barely make it by

What defines an economy in transition?

lots of range due to development @ different rates, lots of growth in productivity, per capita is raised, market liberalization promotes foreign investment ad exports

What is the relationship between governments and

economic freedom?

Freedom needs protection from gov regulations but too much hurts efficiency and restricts entrepreneurial

Which countries are the most unfree in the world?

The BRIC countries

What do developed countries do to help with Economic Freedom?

They increase trade, lower corruption, raise stability, promote economic choice, regulate investment and financial freedoms

Is economic freedom necessary for growth?

It would seem so but some authoritarian governments have had significant economic growth

What is state capitalism?

State capitalism is a combination of freer markets and some government control, which creates growth and prosperity for the state

Define market economy

Individuals make most decisions, rooted in capitalism, "invisible hand", found in developed countries and legitimizes profits

Relationship between government and economy

The less government interaction equals the more efficient a market becomes

What is a shadow economy?

It includes the illegal stuff such as prostitution and selling crack

How does a manager improve macro estimates?

Adjust rate of economic growth, size of population and purchasing power

What do monetary measures do?

They indicate whether economy is expanding or contracting, needs boost or constraint or if it's threatened by inflation/recession

What is Economic Freedom's relationship with a country?

It has a strong relationship to the countries relative competitiveness and innovative performance

What causes bad estimates in monetary measures?

Sustainability and Stability

What is sustainability?

Green economics that economy is apart of, endorses a broader accounting of gains and costs or growth that fall beyond monetary measures

What is stability as defined by the book?

Impossible to meet needs of everyone and happynomics measures this in a country

What are the economic rationales that we discussed?

Unemployment to create jobs, protecting emerging industries in order to help create success, preserves national culture, maintain or try to expand sphere of influence and promote acceptable business practices abroad

What were the industrial bases 4 assumptions?

1) surplus workers header to manufacturing increases output but hurts agriculture

2) Import restrictions lead to foreign investment inflows and more jobs in manufacturing

3) Prices and sales of agricultural products and raw materials fluctuate, which hurts companies that are dependent on them

4) Markets for industrial products grow faster than agricultural markets

What are the keys to having positive relationships with other countries?

Balancing trade adjustments, access to fairness, import restrictions as a bargaining tool, affecting the exports prices

What is meant by comparable access to fairness?

notion that industries are entitled to the same access to foreign markets as foreign industries have to there's, product costs decrease with economies of scale

Optimum tariff theory

Foreign producer lowers it's exports prices when an importing country places a tax on it's products, which makes benefits shift to importing countries $

What do tariffs do compared to nontariffs?

The first directly affects price and the second affects either price or quantity

What is a key issue with import tariffs?

They raise price which gives domestic priced goods an advantage and collection costs override revenue of tariff in developing country

What do subsides do?

They offer direct assistance to companies to boost their competitiveness and are vital for agriculture in developed countries

What is a quota?

Limits the quantity of a product that can be imported or exported in a given time frame per year

What do import quotas do?

Raise price by limiting supplies and provide little incentive to use price competition, most companies move production to lower priced countries then import it back

What do export quotas do?

Provide domestic consumers a sufficient supply of goods @ low price to prevent depletion of natural resources

What is Voluntary Export Restraint?

Country A asks Country B to lower exports to Country A

What is an embargo?

Prohibits all trade, done for political gains

What is the fastest growing sector?

Restrictions on service

Chapter 7 Case 2

Us has good pharmaceuticals, those companies set US prices and US consumers subsidizes purchases by people in other country since the company knows that they will pay for it. The people want lower prices, longer patents and more imported medicine but the US government hasn't budged

What are the restrictions on service talked about in the book?

Essentially, Not for profit services, standards and immigration

What was the chicken tax maneuver?

Meant to help Ford but hurt them more, very hard to fix since it helps some of the markets

What are infant industries tools?

Subsides, FDI regulations, Domestic Content Law, Makes foreign products uncompetitive, Limiting foreign investment until industry reaches adulthood

What are examples of essential industries?

Steel and Aluminum

What does multilateralism depend on?

Good will of countries to implement multilateralsim

Why does Walmart tend to have trouble in India?

India has a lot of small businesses and walmart takes away a lot of business from them, so local content protects business

What was the TTP and why was a goal.

It was the Trans-Pacific Partnership that would reduce interventions levels of 12 countries, while the goal was to influence china on issues and get them to join

Why did Trump reject the TTP?

National security issues on rationale for tarrifs and to send major message to China

Why did Garica show the Douglas shooting video?

Kids tried to influence the new laws regarding the shootings

What is ironic about people trying to stop globalization?

They end up benefiting since a majority of our stuff in America is made overseas

What is the love/hate relationship between Us and Europe?

Europe loves our stuff (fast food as example) but they hate our foreign policy after 911, they blame a lot of issues on America but believe that world is a better place if US leads world

Why do countries think China is gaining on the US with foreign power?

US isn't helping enough and that Trump causes issues

What happened in pizza for Pesos video?

Lots of Americans got mad that mexicans could pay in pesos and that it encourages illegal immigration

Chapter 5 case 1

GE "Green is Green", commitments to make world cleaner and save environment, do people really want clean energy and will they pay for it is a question?

What does CAGE stand for?

cultural, administrative, geographic, economic

What are three ways to help foreign production design?

Ownership, location and internalization

Why do countries want capital inflows?

They provide foreign exchange needed to import goods and services to pay off foreign debt

What are the three levels of ethics?

Pre-conventional (happens with children), Conventional (learn from peers and society) and Post-conventional (people know to do right things)

Teteclogical approach

Decisions are based on consequences of actions

Utilitarianism approach

Consequence based theory of morale reasoning

Dentological approach

Asserts that we make moral judgement or engage in moral reasoning independent of consequences

How can ethical behavior help gain an economic advantage?

It helps builds trust with customers

Define relativism

Ethical truths depend on the values of a particular society and varies

How do levels of corruption correlate with growth rate

Higher corruption leads to lower growth rate and lower per capita income

What are reasons for law to justify behavior?

Law embodies principles, law defines rules, law is enforceable, law is wideranging

What does the Paris agreement need?

It needs the help of the public and private sector

What do MNE's do with child labor?

Can't buy from companies who use child labor and go in and try to educate kids

What are the four dimensions of corporate responsibility?

1) Setting Global Policy

2)Communicating code to everyone

3)Ensuring policies are carried out

4)Report results to outside shareholders

Chapter 7 Case 2

Anglo American company tried to help with AIDS treatment by spreading education and awareness but spent lots of $, but Africans didn't want to be tested and the union didn't approve of it

What is the broadest measure of economic activity?

GNI

Ethical dilemnas include?

Some balance between means and end

Which group set policies more aggressive than the Kyoto Protocol?

EU countries