Unit 3: To what extent does globalization contribute to sustainable prosperity for all?

Question 1

Sustainable

Answer 1

• Able to be maintained at a certain rate or level

Question 2

Prosperous

Answer 2

• Wealth and success

Question 3

Sustainable Prosperity

Answer 3

• Continued good fortune
• Continued wealth and success

Question 4

Contemporary Globalization

Answer 4

• Period of globalization beginning in 1945 to present day

Question 5

Bretton Woods Agreement

Answer 5

• Meeting of 44 nations to discuss post WW11 international monetary systems

Question 6

Gold Standard

Answer 6

• All standard money would be convertible into gold and could be traded at any point for gold

Question 7

What was the disadvantage to the gold standard?

Answer 7

• Countries could only print as much money as they held in their gold reserves
• Can cause inflation
  Ex. a country with a billion dollar worth of gold could only print a billion dollars worth in currency

Question 8

Inflation

Answer 8

• Where a country ends up with more currency but each unit of currency is worth less

Question 9

Fixed Exchange Rate

Answer 9

• Currency value is set by its government

Question 10

Floating Exchange Rate

Answer 10

• Currencies value is decided by supply and demand

Question 11

World Bank

Answer 11

Intergovernmental organization
- Provides long term loans to developing countries
- Founded by John-Maynard Keynes

Question 12

What are developing countries required to do in order to receive loans from the World Bank?

Answer 12

• Countries are required to meet certain political and economical conditions such as increasing democracy or adopting western free market conditions

Question 13

International Monetary Fund

Answer 13

• International Agency
• Works to bring stability to international monetary affairs and help expand world trade
• Short term financial assistance
• Founder is John Maynard Keynes

Question 14

Recession

Answer 14

• A period of reduced economic activity lasting longer than six months

Question 15

General Agreement on Tariffs and Trade (GATT)

Answer 15

• International agreement meant to regulate trade
• Aimed to reduce trade barriers, and eliminate preferences
• Turned into World Trade Organization

Question 16

World Trade Organization (WTO)

Answer 16

• International organization
• Aims to improve trade relations among world countries, especially by removing trade barriers

Question 17

Centrally Planned Economy

Answer 17

• System where government planners decide what goods to produce and how many
• Past

Question 18

Free Market Economy

Answer 18

• System in which government does not intervene in the production and control of goods and services
• Present

Question 19

Trade Liberalization

Answer 19

• Process of reducing barriers to foster trade

Question 20

Milton Freedman

Answer 20

• American economist
• Supported economic liberalization, capitalism, and free trade

Question 21

Fredrick Hayek

Answer 21

• Supported economic liberalization, capitalism, and free trade
• Influenced British economic system

Question 22

Margaret Thatcher

Answer 22

• Prime Minister of Britain 1979
• Influenced by Fredrick Hayek to insert capitalist policies into society

Question 23

Fair Trade

Answer 23

• Trade in which fair prices are paid to producers in developing countries

Question 24

Free Trade

Answer 24

• International trade left to its natural course without trade barriers such as tariffs

Question 25

Monopoly

Answer 25

• The exclusive possession or control of supply or trade in commodity or service

Question 26

Organization of Petroleum Exporting Countries

Answer 26

• Formed to regulate oil production and markets
• Have monopoly on oil