chapter 5 Flashcards
Mercantilism
An economic theory and a political ideology opposed to free trade; it shares with realism the belief that each state must protect its own interests without seeking mutual gains through international organizations.
Economic liberalism
An alternative approach, generally shares with liberal internationalism a belief in the possibility of cooperation to realize common gains. It holds that, by building international organizations,institutions and norms,states can mutually benefit from economic exchanges.
Free trade
The flow of goods and services accross national boundaries unimpeded by tariffs or other restrictions.
balance of trade
The value of a states exports relative to its imports
Comparative advantage
The principle that says states should specialize in trading goods that they produce with the greatest relative efficiency and at the lowest relative cost(relative, that is, to other goods produced by the same state).
autarky
A policy of self reliance avoiding or maximizing trade and trying to produce everything one needs(or the most vital things) by onself
Protectionism
The protection of domestic industries against international competition, by trade tariffs and other means.
ward off
to prevent someone or something unpleasant from harming or coming close to you:
In the winter I take vitamin C to ward off colds.
dumping
The sale of products in foreign markets at prices below the minimum level necessary to make a profit
Tariff
A tax imposed on certain types of imported goods(usually as a percentage of their value) as they enter the country.
Nontariff barriers
Forms of restricting imports other than tariffs, such as quotas (ceilings on how many goods of a certain kind can be imported).
World trade Organization
A global, multilateral intergovermental organization that promotes,monitors and adjudicates interantional trade.
General agreement on Tariffs and trade(gaat)
A world organization established in 1947 to work for freer trade on a multilateral basis;the GATT was more of a negotiating framework than an administrative institution.
Doha Round
A series of negotiations under the world trade organizations that began in Doha Quatar in 2001.It followed the Uruguay Round and has focused on agricultural subsidies,intellectual property and other issues.
North American Free trade Agreement(NAFTA)
A free trade zone encompassing the United States, Canada, and Mexico since 1994.
Organization of the Petroleum Exporting Countries (OPEC)
The most prominent Cartel in the international economy;its members control about half of the world’s total oil exports, enough to affect the world price of oil significantly.
Centrally planned economy
An economy in which political authorities set prices and decide on quotas for production and consumption of each commodity according to a long term plan.
Transitional economies
Countries in Russia and Eastern Europe that are trying to convert from communism and capitalism,with various degrees of success.
Hyperinflation
An extremely rapid,uncontrolled rise in prices, such as occured in Germany in the 1920s and in some thrid world countries more recently.
Fixed exchange rates
The official rates of exchange for currencies set by governments ;not a dominant mechanism in the international monetary system since 1973
Floating exchange rates
The rates determined by global currency markets in which private investors and governments alike buy and sell currencies.(there is supply and demand for each state’s currency)
devaluation
A unilateral move to reduce the value of a currency by changing a fixed or official exchanged rate.
bretton woods system
A post world war II arrangement for managing the world economy established at a meeting in Bretton Woods, New hampshire,in 1944.Its main institutional components are the world bank and the international monetary fund(imf)
World Bank
Formally the international bank for reconstruction and devellopment (IBRD), an organization that was established in 1944 as a source of loans to help reconstruct the european economies.
