3.1 Market Integration

Question 1

the ___________ is composed of people. It is the social institution that organizes all production, consumption, and trade of goods in the society.

Answer 1

Economy

Question 2

Economic systems vary from one society to another. But in any given economy, production typically splits into three sectors. What are these sectors?

Answer 2

1. Primary Sector
2. Secondary sector
3. Tertiary sector

Question 2

Extracts raw materials natural environments.
Ex. Agriculture, fishing, dairy, forestry

Answer 2

Primary Sector

Question 2

Gains the raw materials and transforms them into manufactured goods.
Ex. Manufacturing Industries

Answer 2

Secondary sector

Question 2

It offers services by doing things rather than making things.
Ex. Service Sectors

Answer 2

Tertiary sector

Question 3

An agreement under which gold was the basis for the U.S. dollar and other currencies were pegged to the U.S. dollar’s value.
1oz. Gold = 175 Nicaraguan cordobas
5 cordobas = 1 dollar

Answer 3

THE BRETTON WOODS SYSTEM/AGREEMENT

Question 4

This was established to administer responsibility to coordinate and regulate international monetary transaction as well as to promote economic prosperity and political stability.

Answer 4

IMF – International Monetary Fund

Question 5

This was primarily designed for the Marshall Plan to extend financial loans to reconstruct the devastated economies in Europe.

Answer 5

World Bank

Question 6

The General Agreement on Tariffs and Trade (GATT) was established in 1947 charged in crafting and policing multilateral trade agreements. Today, it is known as ___________

Answer 6

World Trade Organization (WTO).

Question 7

the U.S. dollar became the global currency

Answer 7

the Bretton Woods system

Question 8

eliminating restrictions on the currencies of member states in the international trade

Answer 8

the Bretton Woods system has five key elements.

Question 9

the establishment of an overseer for these exchange rates; thus, the International Monetary Fund (IMF) was founded.

Answer 9

the Bretton Woods system has five key elements.

Question 10

“the official monetary authority in each country (a central bank or its equivalent) would agree to exchange its own currency for those of other countries at the established exchange rates, plus or minus a one-percent margin.”

Answer 10

the Bretton Woods system has five key elements.

Question 11

the expression of currency in terms of gold or gold value to establish a par value.
All other currencies is linked to the US dollar and the dollar is linked to gold.

Answer 11

the Bretton Woods system has five key elements.