Exam 1 Flashcards
Globalization
the socioeconomic reform process of eliminating trade, investment, information technology, and cultural and political barriers across countries, which in turn can lead to increased economic growth and geopolitical integration and interdependence among nations in the world.
Digital Divide
the perceived economic gap between countries or people with easy access to digital and information technology (and its benefits) and those with very limited access, or none at all
Economic Reform
economic policy changes that promote private sector development, competitive markets, market-pricing, freer trade, and deregulation
Sustainable development
economic development that meets the needs of the present generation without compromising the ability of future generations to meet their own needs
Antitrust laws
national laws aimed at maintaining competition in all sectors of the economy and preventing monopolistic behavior of firms.
Institutions
the rules, enforcement mechanisms, and organizations that support market transactions
Liberalization of the trading system
lowering and/or removing trade barriers such as tariffs, quotas, and subsidies
Decopuling
a fundamental global shift in which industrialized country-dependent developing economies begin to grow based on their own underlying economic strengths rather than the ups and downs of the world’s richest countries
Digital Era
the period of transformation that adjusts lifestyles to make the Internet and wireless technologies a part of everyday life
Theory of Comparative Advantage
refinement of Adam’s Smith theory and is attributed to David Ricardo. Claims that a country should produce a the commodity in which it has the greatest advantage.
Mercantilism
Theory of international trade that supports the premise that a nation could only gain from trade if it had trade surplus.
Specific Tariff
an import tax that assigns a fixed dollar amount per physical unit
Preferential duties
refer to low tariff rates applied to specific imports coming from certain countries. Under this system, the same goods imported from a country outside of preferred group will be subject to higher tariff.
Import quota`
a limit on the amount of a good that can be imported
Voluntary export retraint (VER)
occurs when an efficient exporting nation agrees to temporarily limit exports of a product to another country to allow competitors in the importing country to become more efficient.
General Agreement on Tariffs and Trade (GATT)
Renamed World Trade Organization (WTO) in 1995.
Most favored nation
favored treatment to one country that’s automatically extended to all other members countries.
Reasons for Regional Integration
economic, political, or a combination of both.
custom union
all free-trade member countries will adopt a common external tariff with nonmember countries.
EU
Headquartered in Brussels, is the most highly evolved example of regional integration. NOT all of the member use Euro as their currency.
NAFTA
Allows open trade between the US, Mexico, and Canada.
political union
economic and political integration whereby countries coordinate aspects of their economic and political systems
benefit of regional integration
Creating a larger pool of consumers with growing incomes and similar cultures and values.
Cost of regional integration
Eliminating jobs and increasing unemployment in protected industries
