Latin America Govt. and Econ. PT2 Flashcards
In which country would it be most difficult to start a business?
Cuba
Why do countries specialize?
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Countries specialize to utilize their natural resources and produce goods/services more efficiently and cost effectively.
What is the purpose of a tariff or quota?
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The purpose of a tariff and a quota are to help your own economy. A tariff is a tax on imports and a quota is limiting the number of goods being imported to your country.
What is the purpose of an embargo?
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The purpose of an embargo is to hurt the economy of another country. An embargo occurs when a country STOPS all trade with another country.
Why does international trade require a system for exchanging currencies between nations?
Countries require a system to exchange currencies so they can trade goods and services.
What is the purpose of NAFTA?
The purpose of NAFTA was to make trade easier amongst Canada, the United States and Mexico.
How does the literacy rate affect the standard of living?
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The higher the literacy rate the higher the standard of living.
Give an example of a capital good and explain how that affects the gross domestic product of a country.
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Examples of investing in capital goods include new or updated factories, machinery and technology. Investing in capital goods will raise the GDP of a country by providing the tools it takes to make a product/provide a service quickly and efficiently.
How do natural resources impact a country’s economy?
The more natural resources your country has access to, the more likely it is you will have a stronger economy. It also helps a country determine what they will specialize in to maximize their profit.
Why is GDP per capita more useful to use when comparing countries?
GDP per capita is more accurate when comparing countries due to the fact that it looks at the population of a country and how productive the country is as a whole. For example, if two countries have the same GDP one might conclude that their economies are equal. However, if one country has a much smaller population, then they would actually be more productive.
What do entrepreneurs do?
Entrepreneurs take risks with their own money in order to start a business. They are usually creative, innovative, and have the ability to organize and manage.
What are three ways entrepreneurs benefit a country and improve its economic growth?
They start new businesses, provide jobs, and come up with innovative goods/services, pay taxes, influences the GDP
What does each country specialize in?
Brazil:Soybeans, iron ore Cuba: Sugarcane, tobacco Mexico: Automobiles, silver, oil
