Chapter 6-8 Flashcards
The production process has also become much more fragmented due to vertical
Specialization and outsourcing
Changes In where production takes place are frequently tied to changes in patterns of
Foreign direct investment
Demonstrated the free trade increased efficiency and had the potential to make everyone better off
Law of comparative advantage
States can intentionally create comparative advantage is in the production of new goods and services simply by adopting… such as provision of cheap loans and export subsidies to domestic producers
Strategic trade policies
The principles of… treatment required dad important good be treated the same as equivalent domestically produced goods and that improves from one nation could not be given preference over those fun another
National Trippin and most favored nation
Free trade was slowly replaced as the central principle by the notion of
Fair trade
Liberalized trade in such things as banking in Insurance, transport and telecommunications services by applying the principles of national treatment and most favorite nation to them
General agreement on trade in services
Required countries to maintain a minimum standards for protection of patents,copy rights and trademarks and to effectively enforce those standards
Trade related aspects of intellectual property rights
The WTO uses…that rule on trade disputes giving the WTO an enforcement mechanism that the GATT do not have
Dispute settlement panels
NAFTA and Asia Pacific economic cooperation belongs to
Regional trade agreements
The WTO members’current mixture of economic liberal, mercantilist and sometime structuralist trade practices is best described as
Managed Trade system
Affect the value of everything a nation buys or sells on international markets
Currency exchange rates
Betting that the value of a currency or market price for a certain items or service will go up and earn the owner a Profit when it is sold
Speculation
Foreign investment in stocks and bonds not regulated by the state
Hot Money
A tightly integrated international order that existed until the end of World War One
Gold standard
Created by the United States and its allies before the end of World War II and managed by the IMF
Fix exchange rate system
Limits on how much money could move in and out of the country
Capital controls
Allowed individual nationstates to continue regulating domestic economic activities within their own geographical borders
Keynesian Compromise
Registers and accounting of all the international monetary transactions between the residents Created by the United States and its allies before the end of World War II and managed by the IMF of one nation and those of other nations in a given year
Balance of payments
Income states generate for international transactions especially oil exports that can be used to purchase for assets or to pay off foreign debt incurred in the past
Sovereign wealth fund
First the ability to respond to domestic political force often referred to as monetary autonomy. Second international capital mobility necessary for efficient international finance and third stable exchange rate desirable for smooth international trade and investment
Mundell Trilemma
A series of actions to which the borrowing government have to agree before receiving a loan
Structural adjustment policy’s
Currency devaluations ,price stability, fiscal austerity, tariff liberalization, higher interest rate, sound social programs
Conditionality
A system in which the government gave some banks favorable treatment in return for bribes or loans from the banks
Crony capitalism
Which is essentially a confrontation between a central banks which pledges to maintain its countries exchange rate at a certain level, and international currency speculators, who are willing to wager that the central bank is not fully committed to its exchange rate goal
Speculative attack
Loans made to risky you borrowers with weak credit scores who often allowed to make interest only repayments early in the loan circle
Subprime mortgage loans
Contracts that give banks in Insurance against default by borrowers and and that allow investors to bet on the possibility that companies would default on their loans
Credit default swap
Which prohibits banks from owning hedge funds and engaging in such a risky trading
Volcker rule
A collection of credit intermediaries such as hedge funds, private equity groups and money market funds that use exotic instruments like derivatives and securitization to borrow and invest trillions of dollars
Shadow banking system
