topic 7.6 trade and world economy

Question 1

Self-sufficiency

Answer 1

producing all necessary goods and services for your country domestically.

Question 2

International trade:

Answer 2

focusing on a few key industries and trading for the rest

Question 3

Why is this the preferred path?

Answer 3

You don’t have to do it all, especially if you can’t. You can find what you are good at comparatively and trade for the rest

Question 4

Deindustrialization:

Answer 4

the decrease in industrial (secondary sector) jobs

Question 5

Positives:

Answer 5

means your country is economically maturing and increasing the number tertiary and beyond jobs

Question 6

Negatives

Answer 6

they are still jobs, and people will lose them when these businesses close and go elsewhere

Question 7

Complementarity

Answer 7

the mutually beneficial trade relationship between two countries that results when they have different comparative advantages

Question 8

Comparative advantage

Answer 8

the relative cost advantages of producing certain goods and services for trade, basically: I may not be the best at producing this, but in comparison to what I could do, when do I have an advantage on

Question 9

Neoliberal policies:

Answer 9

the belief that open markets and free trade around the world will lead to economic development everywhere, FREE TRADE POLICIES

Question 10

Free trade agreements

Answer 10

an agreement to keep trade barriers, tariffs (taxes) low between trade partners

Question 11

Trading bloc:

Answer 11

groups of countries that agree to common trade policies

Question 12

European Union (EU):

Answer 12

economic alliance between member European countries. Goal is to promote economic development. Keeps trade barriers low, has a common currency, and common passport for ease of travel

Question 13

World Trade Organization:

Answer 13

organization that helps countries negotiate trade agreement, settle disputes, and oversee trade rules

Question 14

Mercosur

Answer 14

free trade agreement between member countries in South America

Question 15

Organization of Petroleum Exporting Countries (OPEC):

Answer 15

organization that controls vast petroleum supplies. Majority of countries are in the Middle East. Depending on relations with the Middle East, the supply of oil may be manipulated. For example: the 1970s OPEC cut off oil to the U.S. and mass hysteria ensued

Question 16

United States-Mexico-Canada Agreement (USMCA):

Answer 16

based on the original NAFTA (North American Free Trade Agreement), keeps trade barriers between Canada, US, and Mexico low and encourages economic development in North America. Has allowed for multinational corporations to operate factories (maquiladoras) in Mexico.

Question 17

Tariffs

Answer 17

taxes on trade goods

Question 18

Explain the global financial crisis of 2007-2009.

Answer 18

Due to the housing market crash (too many people granted home loans and could not pay them back), banks struggled to provide loans to corporations making it difficult for them to have normal operations, and caused many of them to lay off workers. Which made it hard for them to pay their mortgage. It continues to spiral. Due to a global economy, other countries are also impacted.

Question 19

What is the purpose of the International Monetary Fund?

Answer 19

To insure the stability of the international monetary system that allows countries to conduct business with each other