Final Exam Flashcards
Globalization has greater ______ (culture, technology, politics, military, and economics) and shrinking _____ (focus on economics)
Connectivity
Economics
Since 1955, the volume of the world _____ has grown much faster than the world ____ as a whole
Trade
Economy
For many countries, trade has been the engine of ____
Growth
Free trade benefits:
Developing countries annual growth ___% for ___ years
Developed countries ___% annually
7% for 25 years
2.5%
Free trade is beneficial for societies in the ____
Aggregate
Free trade benefits ___ and ___
Consumers and producers
Opportunities for producers with free trade (2):
- New markets - expansion
- Greater efficiency
Free Trade = ____ products for consumers
Example, many goods available at Target stores come from _____
Labor costs in ____ are relatively low, so their products are relatively _____
Cheaper
China
China
Inexpensive
The theory of practice of shielding a country’s domestic industries from foreign competition by taxing imports
Protectionism
Barriers to Trade: _____ shelters _______ from foreign competition
Protection
Domestic producers
Trade barriers make foreign goods more ____ to ____
Expensive
Consumers
Trade barriers: Domestic consumers are more likely to purchase _____ products
Domestic
Different types of protectionism (5):
- Import Prohibitions
- Import Quotas
- Tariffs
- Discriminatory internal taxes and regulations
- Production subsidies
Import prohibitions: Some _____ are prohibited. Completely insulates state’s A’s domestic car industry from ____ competition.
Exports
Foreign
Import prohibitions: common with sensitive _______.
Example of import prohibition:
Military technologies
Example of import prohibition: Thailand prohibited imported cigarettes until 1990s
Import quotas are the numerical limits on the amount of ______ that can enter a country in a given ____
Imports
Year
Import quotas: ____ the market is reserved for _____ market
Half
A’s domestic
Import quotas:
US imposed ____ quotas on China from ___ to ___
Textile
2006-2008
Taxes on the import or export of a good
Tariffs
Tariff:
A could imposed 20% tariff on every car ____ from B. Raises costs of __ cars by __%
Imported
B
20%
India imposes tariffs on imported ___
Wines
Discriminatory international taxes and regulations:
Impose higher _____ on ____ cars
Internal taxes
Imported
Discriminatory international taxes and regulations:
Taxes: Sales tax on A could be 20%, but it could be ___ for B
Operates same way as ____, cost is ____
40% (Higher)
Tariff
Higher
Discriminatory international taxes and regulations:
Regulations: A could require that B cars be fitted with ____ pollution control that ____ the costs for B
Expensive
Raises
Canada has higher regulations on imported ____
Alcohol
Production subsidies: State A protects industry by giving it subsidies.
Giving _____ to ____ car producing firms. ____ cost for A rather than ___ cost for B.
If subsidies are high enough, can ___ price for A such that B is no longer ____
Cash payments
Domestic
Reduces
Raise
Reduce
Competitive
US _____ sugar industry
Sugar is more ____ in the US
Cost passed onto American ___ and ___
Pay $___/B per year, $____ per year/per capita
Subsidizes
Expensive
Taxpayers
Consumers
2.3B
$7.30
Price of sugar per pound in America is nearly ____ than the world average
Double (higher)
Losers of Protection:
US sugar subsidies -
Losers (2):
- Consumers (Industries that use sugar like soft drink makers, citizens)
- Exporters (Concerned about retaliation from foreign governments
US protecting sugar industry:
$_____ campaign finance dollars spend from 1989-2014
$_____ spent on lobbying involving sugar industry
$93,120,760
$71,724,660
Era of globalization: ____ benefits but incentivizes to protect ____ industries
Everyone
Domestic industries
GATT stands for ______ and was signed in ____ by ___ states. ____ institution for cooperation on ___ policy
General Agreement on Trade and Tariffs
1947
23 states
Dominant
Trade
Several rounds of negotiations including the _____ (1986-1994) led to the formation of the WTO in ____
Uruguay Round Negotiations
1995
World Trade Organization has ____ member states. Each member has ____. Equal ___ but not necessarily equal ____. Decisions based on ____.
164
One vote
Rights
Power
Consensus
GATT: “Remove or diminish _____ that impede the flow of ____ trade and to encourage by all available means the expansion of ____”
Barriers
International
Commerce
WTA two primary functions:
- Forum for negotiations
- Compliance
Two parts of compliance:
- Monitor
- Dispute settlement
Dispute Resolution Mechanism: WTO members have agreed that they will use the ____ system of settling disputes instead of taking action _____
Multilateral
Unilaterally
Dispute Resolution Mechanism:
___ request as of 2014. US has brought ____ cases against China since 2001
479
15
WTO limiting protectionism: Obligated to refrain from applying _____ and _____ as tools of protectionism
Import prohibitions
Quotas
WTO prohibits ____ taxes and _____
Discriminatory internal
Regulations
WTO limiting protectionism: ____ use of production subsidies
Curtail (Reduce/Limit)
WTO only permits tariffs and production subsidies to a _____
Lesser extent
WTO limiting protectionism: Allows trading partners to focus on one (or two types) of protectionism. Just have to observe ____ set at the border or magnitude of ____
Tariff
Subsidies
Some Exceptions of WTO limiting protectionism (5):
- Security reasons
- For preferences granted under regional and bilateral trade treaties
- For preferences granted to developing countries
- For measures taken to protect a domestic industry against serious injury on account of unforeseen import surges
- Health, environmental protection, public morals
WTO criticisms:
WTO allows ___ nations to purse policies that have ____ effect on ____ states
Developed
Adverse (prevents success, harmful)
Developing
WTO constrains ____ nations from pursuing policies that are in their own ____
Ex. Force ____ states to grant patent rights which can ____ costs of medicine
Developing
Interests
Developing
Increase
WTO criticism:
Lack of _____?
- Informal ____
- _____ bargaining power
- Switch to ____ voting?
- Free trade hurts ____?
Transparency
Power
Unequal
Weighted voting
Impoverished
Goldstein et al. Findings:
Formal membership alone is not associated with ___ levels of ____.
Confirms conventional wisdom that _____ does not matter much
Higher
Trade
Goldstein et al. Findings:
Both ____ and ____ trade substantially more than ______
Other findings: Both ____ and ____ states have benefited from _____
Formal members and Nonmember participants
Nonparticipants
Developed and developing
GATT/WTO
Concentrations of _____ have increased by ___% between 1880 and 2012
Higher than at any time in at least ___ years
Carbon dioxide
40%
800,000
Global temperatures are ___ degrees Fahrenheit ____ today than in 1900
1.4
Warmer
____ influence on the climate system is ____
Human
Clear
Much of recent warming has been in the ___
Ocean
Climate change will hit ____ nations particularly hard, but we are all ____
Developing
Vulnerable
Climate change: We must switch mostly to ___ by ___, and phase out _____ by ___
Renewables by 2050
Fossil fuels by 2100
___% of climate scientists who have published papers on climate change believe not only that the globe is warming but also that the warming is very likely due to _____
97%
Human activity
Climate consequences:
____ glaciers, ____ snowmelt and ____ droughts will lead to more dramatic _____
Melting
Early
Severe
Water shortages
Climate consequences:
____ sea levels will cause costal _____
More intense ____ and other _____
Troublesome new ____ and more _____ diseases
____ and ____ extinctions
Rising
Flooding
Hurricanes
Natural disasters
Pests
Mosquito-borne
Plant and animal
Climate consequences:
People dying from ____ and ____ related flooding, especially in big cities
____
Farmers going broke because of lack of _____
____ failures because of extreme weather
Dangerous and deadly _____ worsening
Warming and sea-rise related
Famine
Water
Infrastructure
Heat waves