Unit 3/4 Review Flashcards
World Bank
Main Goals:
- Issue long-term fifnancial assistance in the form of loans and grants in order to
- improve education and healthcare systems
- improve infrastructure
- eliminate poverty
Heavily-indebted Poor Country (HIPC)
- A country that owes a substantial debt to more developed countries, and that has little to no hope over ever repaying them
- The World Bank and IMF give debt relief, but HIPCs must
- Cut gov. spending
- Selling public assets to the private sector
- Following the principles of free market capitalism
World Bank Supporters
- The number of people living in poverty in less developed countries fell by half; from 41% to 21% in the last 20 years
- Life expectancy in less-developed countries increased by 20 years
- Number of children dying before the age of 5 reduced by 50%
- Adult illiteracy halved to 25%
World Bank Critics
- Criticized for pushing the free market system and assuming it will bring prosperity
- Critics argue the free market is not suitable for countries that:
- Are experiencing corrupt leadership
- Don’t have a stable, democratic political system
- Are experiencing conflict
IMF
- Works together with the World Bank to brain stability to world trade
- Monitors exchange rates
- Provides short-term financial assistance
European Union
The world’s largest and most powerful common market, which works to develop common foreign and security policies
and to address other issues such as citizens’ rights, job creation, regional development, and environmental protection
Tariff
A tax on imported goods or services
- Meant to reduce competition with domestic goods and services
- As tariffs go up, trade goes down
Canadian International Development Agency (CIDA)
Government agency responsible for
administering foreign aid programs in less developed countries
Nationalize
The taking over of ownership by a
government from private business
IMF Strutural Adjustment Program
- To qualify for IMF loans, countries must commit to reforms. They must:
- Open its borders to trade
- Cut public spending
- Increase taxes
- Sell its government owned property to private citizens or corporations
- Pay interest on the loan
Floating Exchange Rate
- The exchange rate of a country’s currency is not fixed by government but finds its value on the foreign exchange market
IMF Supporters
Transparency - The IMF assesses each country’s economic system manually and publishes their findings in the World Economic Outlook and Global FInanacial Stability Report
Financial Assistancce - The IMF offers funds and loans to member countries to address debt problems and reduce poverty
IMF Critics
- Say the IMF often advocates austerity problems (cutting crucial social programs)
- Claim the IMF fails to actively promote democracy and human rights. Instead, they argue that the IMF often supports corrupt military dictatorships and that these dictators are actually given loans to support their regime as those dictatorships are “friendly” with American corporations
- Argue the IMF is controlled by the U.S. and other Western countries
Free Market Economy
A system in which government does not intervene (or intervenes only minimally) in the production and control of
goods and services
Deregulation
Opening an industry to more competition by removing government regulations
G8/G7
- Informal group of 7/8 major industrial democracies
- Meet at annual summits to discuss economic and foreign policies
Quotas
Proportional shares, such as those paid by member countries of the International Monetary Fund
John Maynard Keynes
- Believed the government should play a large role in regulating the economy
- Argued that falling wages resulted in decreased spending
- Believed that during a recession, governments needs to increase funding and decrease taxes to promote consumer spending
Friedrich Hayek
- Believed that when governments try to control society, those societies were doomed for failure
- His theories were based off the analysis of dictatorships
- Opposite of John Maynard Keynes
- Proposed reduceing government spending, taxes, government regulation, power of trade unions, privatizing government-owned industries, and cutting back on welfare
Milton Friedman
- Government intervention should be limited
- People should pursue individual self0interest
- Free trade should be encouraged, the economy should adhere to free market principles
- Government should slowly and steadily increase the money supply to grow the economy
NAFTA
Treaty among Canada, the United States,
and Mexico to improve trade by removing
tariffs and other economic barriers
Economic Nationalism
Concern about the impact of
foreign investment on a country’s economic
independence and identity
Stewardship
The responsible use of the environment; the act of taking care of the natural resources around us
Bretton Woods Agreement
An agreement forged after the Second World War in Bretton Woods, New Hampshire, by 44 countries to establish a system of rules, institutions, and procedures for the postwar global economy
- Created the IMF and World Bank
Trade Bloc
Groups of countries in specific regions that manage and promote trade activities
World Trade Organization(WTO)
- Works to improve trade relations among the countries of the world by removing tariffs and other barriers
Knowledge Economy
The use of knowledge to produce economic benefits
Trade Liberalization
The process of removing or reducing barriers to trade in order to make it easier to conduct trade
- Barriers include tariffs, licensing rules and quotas
Quality of life
Quality of life is the patient’s own subjective view of well-being and satisfaction with her/his life.
Gross Domestic Product Per Capita (GDP/Capita)
The value in US dollars of all goods produced and services provided in a country’s economy in one year, divided by the country’s average population for the same year
Boycott
A consumer’s refusal to purchase goods or services from a company because of disagreement with its corporate policies
Employment equity
The principle of equal pay for equal work, or for work of equal value
Tied Aid
official grants or loans that limit procurement to companies in the donor country or in a small group of countries
Citizen Advocacy
The name given to the committed relationship between a suitable citizen who provides long-term advocacy to a person with a disability
Standard of living
A common measure of the quantity and quality of goods and services to which people have access
Standard of living
A common measure of the quantity and quality of goods and services to which people have access
Human Development Index
The United Nations measure of a country’s level of development based on GDP per capita, life expectancy
at birth, adult literacy, and school enrollment
