Unit 7 Topic 6 Flashcards
What are neoliberal policies?
Economic policies that promote free market principles. These policies are defined to increase the role of the private sector in the economy and reduce the role of the government.
What are some examples of neoliberal policies?
deregulation, liberalization, privatization, austerity, free trade, monetary policy
What is deregulation?
Removing or reducing regulations of business, such as laws and regulations that control prices, protect consumers, or protect the environment.
What is liberalization?
Opening up markets to foreign competition by reducing tariffs, quotas, and other trade barriers
What is privatization?
Selling state-owned enterprises, such as utilities or transportation companies, to private investors.
What is austerity?
Reducing government spending, often in an effort to reduce budget deficits or debt.
What is free trade?
Promoting international trade by reducing tariffs, quotas, and other trade barriers.
What is monetary policy?
Using tools such as interest rates to control inflation and stimulate economic growth.
What are some criticisms of neoliberal policies?
Contribution to income inequality
Contribution to environmental degradation
What are some examples of new organizations using neoliberal policies?
EU, WTO, Mercosur, OPEC, etc.
What is the EU?
European Union;
-Promotes economic, political, and social integration
-Has its own institutions: the European Parliament and Commission
-Have a common currency
-Very interdependent; countries have to help each other
What are the impacts of the EU on member states?
-Economic Integration: All trade and investment are seen in a single, free market
-Political Integration: Cooperation and collaboration among its member states. This helped promote stability and security.
-Consumer Protection: Large range of consumer protection rules and standards. Ensured high-quality and safe products.
-Environmental Protection: Protection rules and standards applied to all member states. Helped protect air, water, waste, and climate quality. Promoted sustainable development.
What is the WTO?
World Trade Organizationan:
An international organization that promotes free trade
Promotes the liberalization of international trade
Sets rules and standards for all member states
What is Mercosur
-Located in South America
-Promotes economic integration within member states
-Aims to create a common market
-Aims to encourage trade with other countries
What is OPEC?
The Organization of the Petroleum Exporting Countries:
-Consists of 13 oil-producing countries
-Aims to coordinate and unify the -petroleum policies of member states
Influences global oil prices
What are supranational organizations?
An international organization that operates above the level of individual nation-states.
What are some characteristics of supranational organizations?
Member states are willing to cede some of their sovereignty to the organization
Powers and functions beyond a traditional international organization
What are some examples of supranational organizations?
European Union (EU), African Union (AU), World Trade Organization (WTO), International Monetary Fund (IMF)
What is comparative advantage?
The ability of a country, firm, or individual to produce a good or service at a lower opportunity cost than other producers.
-Explains why countries specialize in specific goods and services
-A very important concept in international trade
What is complementary advantage?
The ability of two countries to complement each other’s production through trade.
-Both countries benefit from trading with each other
What is NAFTA (now USMCA)?
North America Free Trade Agreement
-Removed all tariffs between America, Canada, and Mexico
-Allowed for maquiladoras to be built
What is the impact of NAFTA on its member states?
-Agricultural Products: Easier for farmers to sell their products to each other
-Automobiles: Automobile manufacturers found it easier to source parts and materials from each other
-Services: Service providers find it easier to work in each other’s markets
-Investments: Allows people to invest and provide investor protections
What are maquiladoras?
Factories in Mexico run by foreign companies that export their products back to the home countries.
-Allowed for cheaper and quicker manufacturing of products
