Test 2

Question 1

Economies of scale

Answer 1

a proportionate saving in costs gained by an increased level of production

Question 2

Dual economy

Answer 2

when you have a class of small elites, non-existent middle class, and everyone else in poverty (no consumers)

Question 3

Vertical trade

Answer 3

when a society has to export and sell is raw materials and they import finished goods (haven’t industrialized)

Question 4

export commodity concentration

Answer 4

when a society has only one thing to sell (overly dependent and leaves them vulnerable to market trends)

Question 5

trade partner concentration

Answer 5

over reliant on selling to 1 or 2 countries

Question 6

heavy multinational corporation penetration

Answer 6

believe that they may disrupt by coming into the country, out compete local businesses, align with elites, and screw over everyone else

Question 7

Inequality points

Answer 7

Inequality discourages political participation of poor people which in turn diminishes access to edu, healthcare, and economic growth and development
Inequality prevents impartial institutions
Enables rich to get richer and the poor to stay poor
The debate between inequality and globalization:
One side states globalization is beneficial because it decreases poverty
The opposition states it just allows the rich to be richer and the poor to be poorer

Question 8

Factors in europe’s economic success

Answer 8

Freedom of expression (encouraged people to have their own ideas and surpassed societies that were authoritarian)
Social values (equality and openness leads to growth)
Functioning of a free market and institutionalized property rights (rights to private property protected under the market system) (allowed property to be inherited so the business could grow and allowed businesses to designate an heir if the business’ head died)
Separation of the secular from the religious (prosper when religion is less restrictive)

Question 9

Inequality between rural and urban areas

Answer 9

It is said that rural areas are decreasing and decaying. There is a growing income gap between rural and urban areas

Question 10

Inequality within poor countries

Answer 10

It is said that the are lacking a large enough middle gap between the rich and poor.

Question 11

Gender inequality

Answer 11

Countries that have the least amount of globalization are said to have the biggest gap of inequality
In general, it shows that women are setting themselves up to surpass men in the future, but still, overall, women’s pay lags behind mens

Question 12

6 dimensions of poverty

Answer 12

Hunger (about inadequate food supplies)
Psychological dimensions (characterized by sense of powerlessness and shame)
Inadequate infrastructure (poor people usually lack access to roads, electricity, etc.)
Low levels of literacy (education often unavailable)
Health problems (poor people generally suffer from illness)
Inadequate income

Question 13

strategies to close the gap

Answer 13

Education and family planning (education usually leads to less children, leads to healthier people)
Democracy (democratic economies can be pressured to reduce inequalities)
Gov’t policies and free trade (can implement affirmative action programs to diminish inequalities)
Reduce corruption (poorest countries are invariably the most corrupt ones)
Pay attention to women (societies that reward women for being involved in gov’t programs etc benefit from talents from them)
Improve agriculture (poverty and inequality are reinforced by the inability to produce insufficient food)
Think small (volunteering for soup kitchens etc and giving small loans to small entrepreneurs to close gap between rich and poor)
Remittances and foreign aid (economic globalization offered greater benefits to poor countries than official development assistance did and then foreign aid declined sharply)

Question 14

Green Revolution

Answer 14

Rising food prices have already pushed over 40 million people into extreme poverty
Green Revolution: concentrated on producing more food from the same amount of land by proved plant breeding, greater use of fertilizers, and irrigation
Causes:
Drought, export bans, stagnant agricultural productivity, high fuel prices that raise the cost of production and transportation, a relatively weak dollar, and a widespread waste of food due to inadequate storage facilities
People have started to concentrate on producing biofuels because of rising petroleum prices

Question 15

Factors impacting development

Answer 15

History of society (was it colonized?)
Social cohesion (no trust leads to no contracts being signed)
Natural resources (need something to sell)
Capital (infrastructure for communication and need investors to start businesses)
Human services (need healthy and educated workforce)
Population (low- labor shortage, high- too many people, not enough jobs)

Question 16

Liberal economics perspective

Answer 16

Focus: to reduce poverty, produce efficiently and grow economically - economies of scale INDUSTRIALIZE
Major arguments: Free trade (go to cheap labor areas and allow investors and corporations to cross country lines), we need to lift everyone and then poverty will decrease
Problems: over-population

Question 17

Dependency perspective

Answer 17

Focus: don’t let in multinational corporations and let local businesses catch up
Explanations of poverty: blames global capitalism
Industrialize and stabilize prices
Problems: maldistribution of wealth and power, favors already industrialized economies

Question 18

Participatory development perspective

Answer 18

Focus: raising quality of life, meet basic needs, people who will benefit must participate
Use labor intensive rural development (USE APPROPRIATE TECHNOLOGY)
Criticisms: won’t produce ongoing growth

Question 19

Grameen Bank

Answer 19

Considers credit as a human right
Women receive most loans
Loans provided to produce income-generating activities
Loans based on trust
Poor have knowledge and skills, not poor bc they’re dumb
Work in groups of 5 people and share responsibilities
Borrowers join groups voluntarily
Groups receive training in management
Bank stagg implement the core principles

Question 20

Modernization theory

Answer 20

poor countries can change their status if they increase their economic growth, and adapt to new ideas

Question 21

How the IMF responded to the global economic crisis; primary source of IMF financial resources

Answer 21

The IMF strengthened its lending capacity and approved a major overhaul of its financial support mechanisms, with additional reforms in response to the global economic crisis
Member quotas are the primary source of IMF financial resources. A member’s quota broadly reflects its size and position in the world economy.

Question 22

World Bank’s original goal and how it has evolved

Answer 22

Original goal was to funnel loans to emerging economies and reboot europe’s economy
Since changed to just reducing poverty in general
The world bank is trying to win the US over by revamping the system. He is trying to raise funding for projects by really focusing on private investors

Question 23

IMF

Answer 23

Promote stability of international financial system
Promote international monetary cooperation
Facilitate expansion of international trade
Assist in the establishment of a multilateral system of payments
Make resources available to members experiencing debt payment difficulties
Do surveillance and give policy advice based on that
Give loans to in-debt and developing countries

Question 24

World Bank

Answer 24

Poverty reduction
Goals: end extreme poverty and foster income growth in bottom 40% of every country
Wanting to stay a contender, so signing on with private investors

Question 25

Criticisms of World Bank and IMF

Answer 25

(Conditions they put on their loans) (structural adjustment provisions)
Privatization (anything the gov’t owns should be sold to private sector)
Austerity measures (cutting gov’t spending)
Drop protectionist measures (tariffs) and reduce regulation (lets in foreign businesses)
Create incentives to attract foreign capital
Felt by populations and no one asks for their input

Question 26

GATT

Answer 26

Increase globalization post-war
Provided:
Framework to govern multinational trade
Forum for trade negotiations
Trade dispute procedures
Foundational Principle: non-discrimination
Treat products from trade partner like you would if it was locally produced
Tariffs most common
Other non-tariff trade barriers:
Subsidies
Procurement (buy gov’t stuff from local population)
Environmental/health/consumer protection rules

Question 27

WTO and Doha Round

Answer 27

Decisions made by consensus (made the DOHA round fail because no one could agree - argued over subsidies)
Activities:
Implement trade agreements
Monitor trade policies
Provide dispute settlement - ACTUALLY ENFORCES DECISIONS BY IMPOSING TRADE ON PRIVATE MARKET
Criticisms:
Undermines sovereignty
Lack of transparency (no one sees how decisions are made)
Regulatory “chill” (when policy makers can’t pass something they want for the people bc they’re worried about WTO regulations)
Doha Round sticking points:
Agriculture (subsidies)
Intellectual property rights (piracy and pharmaceuticals)

Question 28

NAFTA

Answer 28

Being re-negotiated because trump wants better deals for america
unique because it involves a developing country (MX) with 2 developed countries(lack of enforceability of lower standards in MX vs US and Canada)

Question 29

TPP

Answer 29

The US left and the other countries stayed in

Just released the final form and should be signed this month

Question 30

TTIP

Answer 30

Suspended due to Brexit (US and EU)

Europeans don’t like it (lower standards in the US)

Question 31

Rationale for globalization

Answer 31

if multinationals can invest in emerging countries, they could create manufacturing jobs, move in industrialization, grow the middle class, and create consumers. Brings new demand, new factories, and economy will grow. Also consumers in developed countries will benefit from cheap goods

Question 32

Challenges to globalization

Answer 32

Rising populist sentiment leading to protectionist policies (putting back tariffs, etc)
Business profits in emerging countries have been disappointing (hyped it up too much)
MNC’s starting to question globalization and considering to invest more domestically

Question 33

Fair trade principles

Answer 33

Fair Trade: way to counter disadvantages to free trade in developing countries (people don’t buy locally bc it’s more expensive)
Principles:
Provide markets for disadvantaged producers
Gender equity
No one gets to screw over anyone else in a business deal
Negotiated fair prices (not determined by supply and demand

Question 34

Fair trade organizations

Answer 34

Producers (people in developing countries)
Importers (people that go to producers, negotiate price, and bring it to industrialized world)
Fair trade retailers (people who actually sell to consumers)
Certifying/labeling organizations

Question 35

South Korea has banned imports of Japanese fishery products due to concern over…

Answer 35

…lingering radiation

Question 36

The US has complained to the WTO about China’s new internet rules because…

Answer 36

…concern that the measures will disrupt communications between a company’s China facilities and its other global operations

Question 37

As described in the 3rd article in Posted Reading 5,

Answer 37

the mexican gov’t has created millions of new jobs under the Pena Nieto administration

Question 38

According to the 4th article in Posted Reading 5

Answer 38

China has recently widened it’s investment in Latin America

Question 39

According to the 5th article in posted reading 5, the Trans-Pacific trade deal

Answer 39

Has been released in its final form

Question 40

Economic projections by the IMF at Davos; “synchronization” and why it is a concern

Answer 40

Says by 2019 advanced economies are going to have a higher growth than expected
major worries about inequality between countries and between generations within countries.