Unit 3: Economic Globalization Flashcards
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
a tax imposed on imports to increase their price and thus reduce competition with domestic products
tariff
GDP
Gross Domestic Product: a measure of a country’s gross domestic product per capita
G8
group of 8: 8 major industrial democracies that meet at annual summits to discuss economic and foreign policies
CIDA
Canadian International Development Agency: a government agency responsible for administering foreign aid programs to less developed countries
a system in which several types of transportation are used to move freight, especially when the starting point and destination are far apart
intermodal transportation
an agreement between or among countries that includes the free trade of goods and services and the free movement of capital and labour within the trading bloc
common market
the worlds largest 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
European Union (EU)
the process of reducing barriers to trade
trade liberalization
government owned companies in Canada
crown corporations
opening an industry to more competition by removing government regulations
deregulation
the sale of government owned industries and services to private businesses
privatization
concern about the impact of foreign investment on a country’s economic independence and identity
economic nationalism
when one company hires another company to fulfill a certain task in production
outsourcing
the use of knowledge to produce economic benefits
knowledge economy
a country’s ability to produce a product or service with comparatively fewer resources than another country
comparative advantage
destruction of forests
deforestation
growth of towns and cities
urbanization
Kyoto Protocol
agreement of industrialized nations to reduce greenhouse gases by 2020
the obligation to maintain resources in a sustainable manner
stewardship
consideration of matters beyond purely material
spirituality
strategies to preserve and protect resources
conservation plan
tax money collected from all provinces by the federal government and then dispensed to distribute wealth more equally throughout Canada
equalization payments
NEP
National Energy Policy: 1980 federal policy under which the government made oil companies in Alberta lower oil prices throughout Canada to protect Canadians from paying global market prices for oil and gas
large scale agricultural businesses
agribusinesses
OECD
organization for economic cooperation and development: international organization that works to meet the challenges of globalization, helping governments achieve sustainable economic growth while maintaining financial stability
