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Political Economy > Final exam > Flashcards

Final exam Flashcards

1
Q

Trade barriers

A

any government limitation on the international exchange of goods

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2
Q

Heckscher-Ohlin Trade Theory

A

The theory that a country will export goods that make intensive use of the factors of production in which it is well endowed. Thus, a labor-rich country will export goods that make intensive use of labor.

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3
Q

Protectionism

A

The imposition of barriers to restrict imports. Commonly used protectionist devices include tariffs, quantitative restrictions (quotas), and other nontariff barriers.

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4
Q

Trade Barriers

A

Any government limitation on the international exchange of goods.

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5
Q

Trade Restrictions

A
  • Tariffs
  • Quotas
  • Nontariff barrier
  • Subsidies
  • Prohibitions
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6
Q

Tariff

A

A tax imposed on imports;

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7
Q

Nontariff Barriers to Trade

A

Obstacles to imports other than tariffs; Examples include restrictions on the number of products that can be imported (quota); regulations that favor domestic over imported products; and other measures that discriminate against foreign goods or services.

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8
Q

Stolper-Samuelson Theorem

A

The theory that protection benefits the scarce factor of production

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9
Q

Microeconomics

A

the study of economic behavior in particular markets

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10
Q

Macroeconomics

A

study of the economic behavior of entire economies by total production and employment

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11
Q

Factors of Production

A
  1. Land
  2. Labor
  3. Capital
  4. Human capital
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12
Q

Depression

A

A severe and prolonged reduction in economic activity, as occurred during the 1930s.

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13
Q

Recession

A

A period of decline in economic activity lasting more than a few months, as reflected by falling output, employment, income, and other aggregates measures.

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14
Q

Comparative Advantage

A

The Ability of a country or firm to produce a particular good or service more efficiently than other goods or services

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15
Q

Absolute Advantage

A

The ability of a country or firm to produce more of a particular good or service than either countries or firms using the same amount of effort and resources

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16
Q

Socialism

A

a political and economic theory of social organization that advocates that the means of production, distribution, and exchange should be owned or regulated by the community as a whole.

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17
Q

Communism

A

a political theory derived from Karl Marx, advocating class war and leading to a society in which all property is publicly owned and each person works and is paid according to their abilities and needs.

18
Q

Protectionism

A

The imposition of barriers to restrict imports

19
Q

Trade restrictions

A
  • Tariffs
  • Quotas
  • Nontariff barrier
  • Subsidies
  • Prohibitions
20
Q

Nontariff Barriers to Trade

A

Obstacles to imports other than tariffs (trade taxes).

21
Q

Who wins with protectionist policies? Who loses?

A
  • Domestic Producers (winners)

* Consumers, exporters, foreign producers (losers)

22
Q

Stolper-Samuelson Theorem

A

The theory that protection benefits the scarce factor of production; if a country imports goods that make intensive use of its scarce factor, then limiting imports will help that factor.

23
Q

World Trade Organization

A

An institution created in 1995 to succeed the GATT and to govern international trade relations. The WTO encourages and polices the multilateral reduction of barriers to trade, and it oversees the resolution of trade disputes.

24
Q

Foreign Direct Investment

A

an investment in the form of a controlling ownership in a business in one country by an entity based in another country.

25
Q

3 Advantages for Firms

A
  • Ownership-specific advantages
  • Internalization advantages
  • Location-specific advantages
26
Q

Does Democracy Help or Hurt FDI?

A

•Investing in a democracy

  • Guarantee property rights
  • More constraints on investment
  • Investing in an autocracy
    * Less taxation
    * Shielded from the will of labor
    * Property rights…?
27
Q

Remittances

A

A sum of money sent, especially by mail, in payment for goods and services or as a gift

28
Q

Foreign Aid

A

money, food, or other resources are given or lent by one country to another.

29
Q

Reasons for foreign aid

A
  • Former colony
  • Military Alliance
  • Ideology
  • Regime Type
  • Strategic Location
30
Q

Negative reasons for foreign aid

A
  • Corruption
  • Lack of institutions
  • Inefficient bureaucracies
  • Infrastructure
31
Q

Patronage

A

The power to control appointments to office or the right to privileges.

32
Q

Reasons for remittances

A
  1. Altruism

2. Familial investments

33
Q

Negative reasons for remittances

A
  1. Can cause a society that depends on them

2. Too much reliance

34
Q

Immigration

A

the action of coming to live permanently in a foreign country.

35
Q

Migration

A

the movement of people from one place to another with the intentions of settling, permanently or temporarily at a new location

36
Q

Refugee

A

A person who has been forced to leave their country in order to escape war, persecution, or natural disaster

37
Q

Emigration

A

The act of leaving a resident country or place of residence with the intent to settle elsewhere.

38
Q

Welfare State

A

a system whereby the government undertakes to protect the health and well-being of its citizens, especially those in financial or social need, by means of grants, pensions, and other benefits.

39
Q

Who gives foreign aid to Whom and why?

A
  1. FDI = Economic incentives

2. Foreign aid = political incentives (Israel and Egypt)

40
Q

Ricardo-Viner Model

A
  1. A model of trade restrictions that emphasizes the sector in which factors of production are employed rather than the nature of the factor itself.
  2. Different than the Heckscher-Ohlin approach
  3. More about the industry, not the capital.
41
Q

Inflation

A

An increase in the economy’s average price level

Political Economy (5 decks)

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