Unit 9.4 - Economics in the Global Age Flashcards
Economic Liberalization
The opening up of a country’s economy to global trade
How Ronal Regan/Margaret Thatcher promoted economic liberalization
Since they wanted free markets, they advocated for cutting taxes, regulations, and government assistance to the poor to help grow the economy
Free Market
An economic system based on supply and demand with as little government control as possible
Globalization
The interaction among people, governments, and companies around the world
Examples (2) of Globalization
The Indian Ocean Trade and European imperialism
How the end of the Cold War promoted economic liberalization
The end of the Cold War meant that previous Soviet satellites could now trade with capitalist, democratic, countries and nonaligned states could also relax restrictions
How Augusto Pinochet promoted economic liberalization
Communist leader of Chile, he helped reduce poverty and increase economic growth by privatizing businesses, taming inflation, and free trade
Ways (5) Deng Xiaoping changed China’s economy
With his policy “Let some people get rich first” he promoted economic growth rather than equality by allowing peasants to lease plots of land, factories to produce more products for consumers, encouraged foreign companies to set up factories in their economic zones, reopened the Shanghai stock market, and allowed for the private ownership of some businesses
Did political liberalization occur under Deng Xiaoping’s rule?
No, people wanted increased freedom of speech and press and for the Communist Party’s monopoly on political power to end but as seen in the Tiananmen Square Massacre, the request was not received well
Knowledge Economy
One that focuses on creating, distributing, and using knowledge and information rather than manufacturing
How the USA has a knowledge economy
Educated workers in California for example use their knowledge for other people to share theirs through technology, communication, innovation, and collaboration
How Finland has a knowledge economy
After the Soviet Union collapsed Finland entered the global marketplace and established the Science and Technology Policy Council, promoting economic growth through technology and innovation, and eventually, they led the way in developing smartphones.
Examples of how Japan’s economy growth modeled mercantilist policies
They increased exports, decreased exports with tariffs, and encouraged competition
Asian Tigers
Hong Kong, Singapore, South Korea, and Taiwan
As the knowledge economy developed in some regions, production and manufacturing in those regions, including in the _____ have declined
U.S.
Manufacturing plants are located in _____ and _____ rather than the US and Europe
Asia and Latin America
Largest Exports in Bangladesh and Vietnam
Clothing (and electronic goods for Vietnam)
NAFTA and how it affected trading in Mexico
The North American Free Trade Agreement; it encouraged Canadian and U.S. companies to build maquiladoras (factories) in Mexico because they had lower wages. The goods produced would then be free of any tariffs. This led to thousands of US jobs being moved to Mexico
GATT Agreement
The General Agreement on Tariffs and Trade, signed by economic organizations like the European Economic Community, Mercosur (in South Amer.), and the Association of Southeast Asian Nations
How the GATT Agreement attempted to promote free trade
It attempted to promote free trade by lifting restrictive barriers to trade
Protective Tariffs
Taxes on foreign imports
Multinational Corporations
Basically joint-stock companies, these corporations are established in one country but then make/sell their goods and services in other countries
How multinational corporations take advantage of knowledge economies and traditional manufacturing
They hire workers in knowledge economies like engineers but then employ workers in low-wage foreign countries to manufacture goods they sell in their global market.
Similarities and differences between NAFTA and GATT
Both attempt to promote economic liberalization through the reduction of tariffs but NAFTA is on a smaller scale while the GATT Agreement connected more regions and was then taken over/corrupted by the World Trade Organization
Are multinational companies and their presence a continuation or change in history?
Continuity, joint stock companies in the past have done the same of being established in one country but then spreading their goods, influence, and control to others such as the British East India Company establishing a major presence in India and helping Britain colonize the country and the Dutch East India country with the Spice Islands.
