Question and Answer

Who is John Maynard’s Keynes and what did he believe in when it comes to the economy?

• A British economist

• that unrestricted capitalism that had existed before WW1 and between two world wars had failed

• the government playing a very limited role in a country’s economy was wrong

Who is Fredrich Hayek and what did he believe in when it comes to the economy?

• an Austrian-British academic and philosopher

• he believed that competition and market would keep an economy healthy and government should stay out of the way

What is Karl Marx considered the father of?

the father of communism and the founder of Marxism

What is the United Nations and why did they hold the UN Monetary and Financial Conference at Bretton Woods? Why was it significant?

• a global organization composed of 193 member states

• they sought solutions for rebuilding post-war economies, avoiding economic instability and trade barriers, avoiding competitive currency devaluations and preventing future global depressions

• created International Monetary Fund (IMF) and the World Bank

What does the World Bank do? What is its roll and function?

• provides long-term loans to countries in financial difficulty

• role is to help member countries improve their economies and living standards for their people

• goal is to eliminate extreme poverty by 2030

What does the IMF do? What is its role and function?

• monitors and tries to reduce exchange rates

• provides short-term financial assistance

• foster global monetary cooperation

• ensure financial stability

• facilitate balanced trade growth

• promoting sustainable economic growth and reducing poverty

What does GATT stand for and how was it created? What did GATT attempt to achieve?

• General Agreement on Tariffs and Trade

• Members would gradually eliminate tariffs and trade barriers

• promote international trade by reducing or eliminating trade barriers suck as tariffs and quotas

What is the EU? What are they known for?

• European Union is a supranational political and economic union of 27 European countries

• Known for its single market, which allows the free movement of people, goods, services and capital

What is the purpose of NAFTA and what is its main economic goal?

• facilitate free trade and investment between canada, mexico, and united states

• promote economic activity and growth

What is outsourcing?

A business strategy that involves reducing costs of using suppliers of products and services in countries where labour is cheaper and government regulations may be less

What is the benefit of outsourcing to consumers?

• lower prices

• better customer service

• greater access to specialized expertise

Where do corporations outsource from usually?

• locations offering a combination of lower labor costs, skilled talent, and favorable business environments

What are the consequences of outsourcing?

• loss of control

• communication challenges

• security risks

• potential harm to employees

• environmental damages

Why is sustainable development important?

• ensures the well-being of current and future generations by balancing economic growth, social equity, and environmental protection

What is foreign aid and how does it affect a countries foreign policies?

• money, supplies, and other goods as well as expertise given by one country to another

• serves a tool for achieving various international objectives, ranging from economic development and humanitarian assistance to geopolitical influence and security interests

What is the economy like under a communist state?

• collective ownership

• production and a centrally planned system where the state controls the distribution of resources

Who benefits from free trade agreements?

• producers

• consumers

• overall economy of participating countries

What is the World Trade Organization?

• ensures terms of trade agreements are followed, settles trade disputes between governments and conducts trade negotiations

• deals with the rules of trade between nations

What was the Great Depression?

a severe worldwide economic downturn, characterized by high unemployment, poverty and drastic redcutions in industrial and international trade

How can big transnational corporations influence the governments of developing countries?

• direct lobbying

• economic leverage

• shaping policy through international trade agreements

What is economic depression?

a severe and prolonged period of economic decline, more extreme than a typical recession

what is a planned economy?

a type of economic system where financial decisions are made according to government plans

What are transnational corporations?

a company that is based in one country while developing and manufacturing its products or delivering its goods and serviced in more than one country

What is economic disparity?

the uneven distribution of wealth and income among individuals or groups within a society

What do outsourcing, maquiladoras, and ship breaking most have in common?

externalizing tasks, processes, or resources that were previously handled internally.

This often involves transferring these activities to different locations, frequently to countries with lower labor costs or more relaxed regulations. 

Which economists had conflicting views about government involvement in the economy? Know all three.

John Maynard Keynes: A british economist who believed in active government intervention in the economy to manage demand and address unemployment

Friedrich Hayek: An Austrian economist who advocated for limited government intervention, emphasizing the importance of free markets in promoting economic efficiency and individual freedoms

Karl Marx: Considered the father of communism, Marx developed theories about society, economics, and politics, emphasizing class struggle and the role of labor in the development of an economy

Shipbreaking

the process of dismantling a ship at the end of its operational life for salvage of parts, materials, and potentially for reuse.

maquiladoras

a factory in Mexico run by a foreign company and exporting its products to the country of that company.