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61 Cards in this Set
- Front
- Back
what is international economics
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not about countries, but about the interactions between countries
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how much land does the world economy exist of
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about 15 times the US
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why is US unusual- richness
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we have 5% of the population, but more than 20% of the world income
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what is world GDP and per capita
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GDP= 40 trillion
per capita= 9 thousand |
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what is US GDP and per capita
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GDP= 12 trillion
per capita= 40 thousand |
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GDP
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gross domestic product
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is US free? give 2 reasons why or why not.
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we dropped to #10 on the scale for economic freedom. this is due to increased govt spending and increased barriers to trade and investment
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Eiras reading regarding freeness... "No Longer a Champion of Economic Freedom"- why is US falling behind
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1)expansion of expensive entitlement programs
2)not freeing markets fast enough/ economic openess not keeping up 3)increased govt spending |
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Eiras (Loss of Economic Freedom) regarding net flow of FDI
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FDI has decreased sharply; this can cause price to fall, less opportunities, less foreigners to invest, our leadership and power to decline
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Eiras(Loss of economic freedom) on govt spending
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includes unemployment compensation, education spending, health programs, agricult subsidies
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Eiras on how to fix lower economic freedom (5)
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1)better trade policy- duty free, no non-tariff barriers
2)help fiscal burden- better tax regimes 3)fewer restrictions for FDI and capital flows 4)less regulations in labor laws, environmental/zoning 5) make informal market (black market) smaller |
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Eiras on how Bush can help increase economic freedom
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cut expenditures, balance federal budget, eliminate barriers, support free trade
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Eiras: How is "economic freedom" defined? How does the Heritage Foundation measure it?
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EF: foundation for US strength. Measured by Index of Economic Freedom. There are 10 sectors ranked 1-5.
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Eiras:Is it inward FDI or outward FDI that the author regards a desirable effect of economic freedom, and why?
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inward FDI
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Eiras: What reasons are given for the fall of the US in the economic freedom rankings?
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expenditure spending, barriers, expansive entitlement programs are given more priority
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How do countries interact economically?
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through trade,
migration (temp and perm workers), direct & indirect policies that affect other countries capital flows- includes financial (holdings of assets abroad) and Real (international ownership) |
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who trades the most?
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EU-15, US, China, Japan, Canada (decreasing order). Developed countries are biggest traders. China is catching up though in trade volume
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who trades with whom?
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rich countries tend to trade more. N.A., Europe, Asia tend to trade with each other. Latin Am and AFrica (poor) trade mostly with rich
rich AND poor trade mostly with RICH |
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What is the biggest traded category of world trade
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manufactures
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what is the fastest growing category of world trade
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mining-- of oil and such
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What does US export/import?
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exports agri, imports oil
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what was the fastest growing category of world trade from 00-04?
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minerals and ores
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whats the fastest growing category of trade today??
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prob fuels, because this is the VALUE of trade and oil prices have been rising drastically
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What percent of all trade is automotive?
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10%
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fastest growing lately of merchandise exports
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iron and steel and chemicals
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does US import or export more
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import more
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what is the US a big importer or exporter of
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export agricult, import oil, export AND import capital goods (machines for making things)
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US's trade and GDP
What is the exception to this |
US exports a lot, but it is a smaller part of GDP than other countries
exception: Singapore and Nepal |
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Whats significant about Singapore's GDP and trading
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Singapore's exports can be more than GDP. This is because their exports are made with imports.
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How do countries interact economically?
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through capital flows- includes financial (holdings of assets abroad) and Real (international ownership)
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What is included in Financial capital flows
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currency, bank deposits, bonds, stocks, bank loans
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What is included in Real capital flows
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real estate, capital assets (plants and equip), sotcks if ownership is large
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In terms of capital flows, how is the US
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we owe more than we own of assets! we are a large net debtor (we spend more than we earn). some of this is govt but a lot if private
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How do countries interact economically
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migration (temp and perm workers), direct and indirect policies
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what are direct policies? (5)
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trade policies, foreign aid, capital controls, exchange rate management, immigration restrictions
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Hufbaurer and Grieco- Payoff from globalization
what are the efects of globalization? |
increased US income and better economic growth
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Hufbaurer and Grieco- Payoff from globalization
how to globalize (4) |
expansion of intl trade (inc GDP),
lower tariffs (stimulates productivity, inc product choices), general equilibrium (inc GDP), productivity benefits |
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Hufbaurer and Grieco- Payoff from globalization
By how much have US tariffs fallen over 60 years? By how much have incomes risen due to reduced costs of trade? |
40%, incomes risen by 1 trillion, 10000 a household
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Hufbaurer and Grieco- Payoff from globalization
With tariffs now low, is their scope for any further liberalization? Why? |
yes, other sectors that havent been affected will be affected (agricul, developin countries, services, transport)
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Hufbaurer and Grieco- Payoff from globalization
Who loses from liberalization, how, and how much? |
personal losses are encountered. people who lose jobs... but this is only a small cost compared to benefits of increased income. those who compete with imports will have serious losses
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Center for Global Development
what percent of exports go to developing countries, and how high are tariffs |
45%, tariffs are higher for developing than developed esp. agri, textiles, footwear. we also tariff processed goods, this decreases profit on manufactured (higher value) goods
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Center for Global Development
How important is trade for the United States, and especially its trade with developing countries? |
1/3 exports go there, 1/3 imports come from them
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Center for Global Development
Did NAFTA help the people in Mexico? |
yes, increased exports and FDI. Created jobs and inc personal income
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Center for Global Development
Do US tariffs cause greater harm in other rich countries or in poor ones? |
poor countries. they are higher in poor. impose taxes on processed goods and we also subsidize things
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Center for Global Development
Who gets more from rich country governments: rich country farmers or poor countries? |
rich country farmers. 80% of help goes to top 10%. Majority go to agribusinesses, despite 90% are small farmers
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Examples of indirect policies
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subsidies of agri, macro policies (monetary, fiscal), environmental policies, standards
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IMF
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International Monetary Fund
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WTO
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World Trade Organization
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OECD
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Organization for Economic Cooperation and Development
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What does IMF do?
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give financial assistance, lends money to countries
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What does World Bank do?
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gives development assistance, helps poor countries be less poor; economically not financially
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When was WTO established?
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1995
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What does WTO do?
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trade policy regulation and negotiation of int'l trade policies/tariffs
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What are "Beggar Thy Neighbor Policies"? and name 2
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hleping yourself at the expense of others-- high tariffs and competitive devaluations
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what are high tariffs?
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tax on imports
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what are compeitive devaluations
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lowering the value of money
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state of economy before WW2
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we taxed them they taxed us. slowed the world economy and made the depression worse
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state of economy after ww2
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end of depression, ww2 created demand for guns, etc.
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what happened at Bretton Woods?
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3 institutions were created
IMF World Bank ITO (International Trade Org)- however, this was never ratified by our congress and the GATT was created in place of this. |
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GATT, define it.
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General Agreement of Tariffs and Trade. interim agreement to govern trade until ITO is ratified. this was around for 50 yrs.
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What changes have happened since 1940 to the IMF?
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instead of being pegged to an exchange rate, they switched to floating exchange rate
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