Week 7

Question 1

What systems were established at Bretton Woods in New Hampshire in 1944?

Answer 1

o IMF – fixed exchange rates & lender of last resort
o World Bank – loans to help reconstruction and development
o GATT – non-discrimination and pursuit of free trade

Question 2

What does national security require?

Answer 2

A favourable balance of trade

Question 3

Why is Industrialisation mandatory?

Answer 3

– Creates externalities in the state
– Equals self sufficiency and political autonomy
– Is the basis of military power

Question 4

Is relative gain more important than mutual gain?

Answer 4

Yes

Question 5

What did the Marshall Plan do in Europe?

Answer 5

Reconstructed war torn Europe by the US

Question 6

What was Neo-Mercantilism?

Answer 6

Use of protectionism – state over market. Focus on economic power rather than military
- The resurgence of mercantilism

Question 7

When did the three European Communities merge?

Answer 7

1967

Question 8

When was the Treaties of Rome?

Answer 8

1957

Question 9

Who has the largest and second largest oil reserves?

Answer 9

1. Saudi Arabia

2. Iran

Question 10

What is OPEC?

Answer 10

The Organisation of Petroleum Exporting Countries

Question 11

When was the oil embargo?

Answer 11

1974

Question 12

What is a Keiretsu and a Chaebol?

Answer 12

Set of companies with interlocking business relationships and shareholdings

Question 13

What is a Flying Geese?

Answer 13

Surplus capital and expensive labour

Question 14

What did USA Mercantilism do to OPEC and Japan?

Answer 14

• Encouraged OPEC to increase oil prices to effect comparative advantage
• Forced Japan to revalue the yen