Unit 3: Economic Globalization Flashcards
(49 cards)
economic globalization
the interconnections of the worlds economies
foundations of economic globalization
the establishment of a new international monetary system, the creation of the World Bank and the International Monetary Fund, the expansion of the free market economy into former Soviet-bloc countries at the end of the Cold War, ,and the impact of new technologies on the movement of money around the world.
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
Bretton Woods Agreement
a global network of institutions established by the Bretton Woods Agreement to promote international trade and the regulation of currency among western countries
international monetary system
international agency that works with the World Bank to bring stability to international monetary affairs and to help expand world trade
International Monetary Fund
the price at which one national currency can be purchased for another
exchange rate
the value of a country’s currency as set by its government
fixed exchange rate
currency rates that are not fixed by the government but instead find their own value on the foreign exchange market
floating exchange rate
a provision of the Bretton Woods Agreement that all printed money, such as paper dollar, would be convertible to gold and could be cashed in at any time for gold
gold standard
a situation in which the amount of currency in circulation increases yet each unit of currency buys less
inflation
an agency of the United Nations that in practice is independent and controlled by its member countries, which provides loans to less developed countries that are in financial difficulty
World Bank
the global economic and political competition from 1946-1989 that divided the communist countries, led by the Soviet Union, against the Western Capitalist countries, led by the US
Cold War
a system under which government planners decide what goods to produce, and how many
centrally planned economy
a system in which government does not intervene in the production and control of goods and services
free market economy
markets in which money that is loaned for a short time to businesses or governments are bought and sold
international money markets
a company that combines its clients money and invests in a collection of stocks, bonds, and other securities
mutual funds
John Maynard Keynes
a British economist that developed theories for a large role for government in the economy
a period of reduced economic activity lasting longer than 6 months
recession
Friedrich Hayek
believed that government role but be limited in economy
GATT
general agreement on tariffs and trade; later became known as WTO
what are the four principles of GATT
conducting trade in a non-discriminatory manner, treating imported goods from a member country in the same manner as domestic goods, protecting domestic industries through tariffs and not through measures such as import quotas or fees, and requiring any country to present a list of tariffs and trade restrictions imposed on member countries
WTO
World Trade Organization: focus on protecting trade; focus on free trade
FTA
Free Trade Agreement between the US and Canada
NAFTA
North American Free Trade Agreement: included Mexico
