TRADE
What is an MFN?
{Most Favored Nation}: "Under WTO rules, members must extend a trade deal offered to one member to the other members."
[Fixed] Exchange Rate.
Currency is best defined as:
The monetary system used by a specific country.
This aid model refers to the small loans given to individuals or families in developing economies.
Oxfam model.
An economic liberal would support the Smoot-Hawley tariff.
False (Mercantilists would!)
Economic liberalism is defined as:
Allowing markets to operate according to the laws of supply and demand with limited government intervention.
"GDP per capita" is best defined as:
A state's total output [divided by] state's population.
GDP: consumption + investment + gov spending + net exports
A political institution that issues currency with the goal of supporting a growing economy with low unemployment and low inflation
A central bank.
GDP per capita is a measure of (1)__; the Gini coefficient is a measure of (2)__.
(1) Wealth; (2) inequality.
[Mercantilists] believe that the market knows the right price and prefer prices to be set according to the laws of supply and demand.
False. [Economic liberals]
What are protectionist measures?
Tariffs, Quotas, Subsidies, Rules and regulations
The presence of excessively available (printed) currency during the French Revolution, resulted in its rapid devaluation and worthlessness as it could not be reasonably spent domestically. This is an example of [THIS].
Hyperinflation.
What are the sources of income for a state.
Microfinance, remittances, & ODA (official development assistance)
Remittance: immigrant money sent to home country
The building up of national industries to replace foreign imports on a mass scale refers to [THIS].
Import Substitution Industrialisation (ISI)
The IMF focuses on alleviating poverty, development, and provides loans for specific projects
False. The World Bank.
If Canada flooded the US market with maple syrup below market value, this would be known as [THIS].
Dumping.
A Saudi company, currently buying land in Arizona to capitalize on unregulated groundwater pumping and sends their crops back to Saudi Arabia, buys the land directly from farmers and ranchers. This is an example of [THIS].
Foreign Direct Investment.
Apple, who built a new manufacturing center in Nairobi, also improved the road leading to it. This is an example of [THIS].
Foreign Direct Investment.
What are the [THREE] structural conditions that contribute to poverty?
1. History of colonisation
2. Loan conditionality (e.g., structural adjustment programs)
3. Political instability
Extraction economies are the predominant type of economies in the periphery.
True.
What is the best definition of a cartel?
A group of producers of a good or service that agree to regulate supply in order to manipulate prices.
What are the trends in international trade in the last 50 years?
1. Increase in FDI
2. Increase in Exports
3. Decrease in Tariffs
[THIS] is the most likely to be part of IMF loan conditionality.
Reduced government spending.
What are the four examples of conditions that the IMF places on loans?
1. Devalue currency
2. Cut gov jobs
3. Privatize state-owned industries
4. Reduce gov subsidies
TRUE.