Contemporary World Midterm Review
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Questions and Answers

Comprehensive strategies that integrate economic and environmental goals are vital for sustainable development.

True (A)

Labor-intensive products like shoes are typically made in countries with the highest wages and strongest regulations.

False (B)

Food security is solely based on the availability of food.

False (B)

High wage workers may lose their jobs due to production moving overseas, benefiting corporations and consumers.

<p>True (A)</p> Signup and view all the answers

The Multiplier Effect indicates that an increase in one economic activity can negatively impact others.

<p>False (B)</p> Signup and view all the answers

Microcredit involves providing large loans to wealthy individuals to start businesses.

<p>False (B)</p> Signup and view all the answers

Globalization has no impact on the livelihood of the poorest people in the world.

<p>False (B)</p> Signup and view all the answers

Microcredit won the Nobel Peace Prize for its potential to alleviate poverty in Bangladesh.

<p>True (A)</p> Signup and view all the answers

Muhammad Yunus is a recognized pioneer in microcredit, helping low-income individuals improve their livelihoods.

<p>True (A)</p> Signup and view all the answers

The Global North-South Divide includes economic disparities based on racial demographics.

<p>True (A)</p> Signup and view all the answers

Gross National Income (GNI) measures the total economic output of a country.

<p>False (B)</p> Signup and view all the answers

Wealth Inequality refers to the distribution of new earnings among individuals within a society.

<p>False (B)</p> Signup and view all the answers

Income Inequality measures the flow of goods and services rather than a stock of assets.

<p>True (A)</p> Signup and view all the answers

The First World is exclusively composed of countries from the Asia-Pacific region.

<p>False (B)</p> Signup and view all the answers

Migration patterns are static and do not influence the Global North-South dynamic.

<p>False (B)</p> Signup and view all the answers

Global Income Inequality highlights disparities between the richest and the poorest regions worldwide.

<p>True (A)</p> Signup and view all the answers

Dependency Theory suggests that underdevelopment is primarily a result of modernization efforts.

<p>False (B)</p> Signup and view all the answers

The Transatlantic Slave Trade only involved the exchange of goods between Europe and the Americas.

<p>False (B)</p> Signup and view all the answers

Castells identified cities as important nodes in various global networks.

<p>True (A)</p> Signup and view all the answers

Bauman claimed that cities are not affected by global problems despite benefiting from globalization.

<p>False (B)</p> Signup and view all the answers

Global stratification refers to the equal distribution of resources and privileges across the globe.

<p>False (B)</p> Signup and view all the answers

Hans Singer and Raul Prebisch developed Dependency Theory in the 1950s.

<p>True (A)</p> Signup and view all the answers

The Liberal Trade theory claims that free trade benefits all countries equally, regardless of their economic status.

<p>False (B)</p> Signup and view all the answers

Core Nations refer to poorer countries that are heavily dependent on wealthier nations.

<p>False (B)</p> Signup and view all the answers

The Semi-Periphery includes low-income countries that provide natural resources to wealthier nations.

<p>False (B)</p> Signup and view all the answers

Core Nations are characterized by their strong manufacturing bases and dominance in the global economy.

<p>True (A)</p> Signup and view all the answers

The World Trade Organization is responsible for providing financial support to nations facing balance of payments issues.

<p>False (B)</p> Signup and view all the answers

Immanuel Wallerstein developed the concept of the capitalist world economy, focusing on interconnections between different economic regions.

<p>True (A)</p> Signup and view all the answers

The Bretton Woods System was established after World War II to prevent political instability and economic turmoil.

<p>True (A)</p> Signup and view all the answers

Periphery countries are often exploited and reliant on core nations for goods, markets, and technology.

<p>True (A)</p> Signup and view all the answers

International Financial Institutions aim to isolate economies to prevent global trade.

<p>False (B)</p> Signup and view all the answers

Major financial crises, like those in Russia and Asia, show that weaker economies can have a larger ripple effect on global finance.

<p>False (B)</p> Signup and view all the answers

The Gold Standard establishes a par value for currencies based on their connection to silver.

<p>False (B)</p> Signup and view all the answers

Exchange Rate Stability refers to countries agreeing to exchange currencies at fluctuating rates based on market demand.

<p>False (B)</p> Signup and view all the answers

The IMF was created to ensure financial stability and oversee exchange rates among member countries.

<p>True (A)</p> Signup and view all the answers

The tertiary sector primarily deals with extracting raw materials from the environment.

<p>False (B)</p> Signup and view all the answers

The U.S. dollar became the principal currency used for international trade and savings after the establishment of the Gold Standard.

<p>False (B)</p> Signup and view all the answers

The General Agreement on Tariffs and Trade (GATT) was formed to address both goods and service trade issues.

<p>False (B)</p> Signup and view all the answers

The saying 'When the American economy sneezes, the rest of the world catches a cold' underscores the influence of the U.S. economy on global markets.

<p>True (A)</p> Signup and view all the answers

The Uruguay Round led to the establishment of the International Monetary Fund (IMF).

<p>False (B)</p> Signup and view all the answers

The World Bank primarily focuses on providing short-term financial assistance to countries in crisis.

<p>False (B)</p> Signup and view all the answers

The North American Free Trade Agreement (NAFTA) was established with the aim of enhancing cooperation by reducing trade barriers.

<p>True (A)</p> Signup and view all the answers

Most countries in the world are not members of the International Monetary Fund (IMF).

<p>False (B)</p> Signup and view all the answers

NAFTA has significantly increased the balance of trade for the U.S., making it $127 billion richer annually.

<p>True (A)</p> Signup and view all the answers

The IMF acts primarily as an investment bank for development projects in low-income countries.

<p>False (B)</p> Signup and view all the answers

One criticism of the IMF is that it lends money to corrupt governments.

<p>True (A)</p> Signup and view all the answers

Consumer food prices rose in Mexico after NAFTA was implemented, despite a drop in producer prices.

<p>True (A)</p> Signup and view all the answers

Canada exports a large portion of its goods to various countries outside the U.S.

<p>False (B)</p> Signup and view all the answers

Flashcards

Food Security Definition

The ability of every person to access sufficient, safe, and nutritious food to meet their dietary needs for a healthy life.

Globalization's Winners & Losers

Globalization creates winners (corporations, consumers) who benefit from low prices, and losers (high-wage workers who lose jobs due to outsourcing).

Low Wage Foreign Workers

Workers in developing countries who face hazardous conditions for jobs with potentially low wages.

Multiplier Effect Definition

An increase in one economic activity leads to increases in other related activities.

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Microedit Loan

Small loans offered to low-income individuals to start and grow businesses.

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Globalization Deficiency

The negative consequences of globalization for the poorest, leading to health problems and lack of access to adequate food.

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5 Components of Food Security

Availability, Accessibility, Adequacy, Acceptability, and Agency, all needed for everyone to have enough food.

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Food Security Winners/Losers

Groups that gain (corporations, consumers) from low costs versus those that lose jobs and income (high wage workers).

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First World

Western capitalist countries, primarily the USA and Western Europe, associated with rich, industrialized nations.

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Second World

Countries aligned with the former Soviet Union during the Cold War.

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Third World

Initially a catch-all term for non-aligned countries, now used to refer to impoverished nations.

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Global Inequality

Unequal distribution of resources, opportunities, and power among the world's population.

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Global North-South Divide

A classification based largely on economic development and wealth, historically racialized, and influenced by migration patterns.

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Gross Domestic Product (GDP)

The total economic output of a country, indicating economic productivity.

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Wealth Inequality

Unequal distribution of assets (natural, physical, and human) among individuals or groups.

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Income Inequality

Unequal distribution of income, reflecting the flow of goods and services.

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Core Nations

Developed, economically powerful nations that dominate global markets.

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Semi-Periphery

Industrializing countries with some economic autonomy, but still reliant on core nations.

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Periphery

Least developed countries reliant on core nations for goods, markets, technology, resources and labor; often experience exploitation.

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Dependency Cycle

A cycle where local elites benefit while the broader population remains disadvantaged, due to shared goals and connections.

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Wallerstein's World-Systems Theory

A sociological theory that explains the relationships between different economic regions in a capitalist world economy.

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International Financial Institutions

Organizations that facilitate trade and promote economic cooperation among nations.

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IMF

Provides financial support/advice to countries with balance of payments issues, stabilizing economies.

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Bretton Woods System

Post-World War II agreement focused on reducing trade barriers and ensuring free money flow to prevent instability.

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Dependency Theory

Argues that underdevelopment in poor countries is a result of exploitation by richer nations, not lack of modernization.

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Global Stratification

Unequal distribution of resources and advantages among countries, often creating a hierarchical arrangement based on wealth, power, and resources.

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Modernization Theory

Proposes that all countries develop in a similar pattern toward becoming 'modern' and developed.

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Liberal Trade

The idea that free trade can sometimes hinder the economic growth of poorer countries instead of helping them.

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Transatlantic Slave Trade

A triangular trade route involving the exchange of goods and enslaved people between Africa, the Americas, and Europe, profoundly impacting labor and production.

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Dependency

A state where the development of poorer nations weakens their independence while contributing to wealthier nations' economic growth.

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Global Networks

Cities often act as important connections across multiple global systems.

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Fixed Exchange Rates

Exchange rates between currencies are set at a specific value.

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Capitalism

An economic system where private individuals and corporations own and operate means of production.

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Primary Sector

Part of the economy involving raw material extraction from the natural environment.

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Secondary Sector

Part of the economy that transforms raw materials into manufactured goods.

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Tertiary Sector

Part of the economy that provides services (not physical goods).

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General Agreement on Tariffs and Trade (GATT)

An international agreement created to reduce barriers to international trade among member countries.

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IMF's Role

The International Monetary Fund (IMF) provides financial assistance to countries facing economic crises, acting as a 'lender of last resort'.

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World Bank's Focus

The World Bank focuses on long-term development, aiming to reduce poverty through specific projects, such as investments in education.

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NAFTA's Purpose

The North American Free Trade Agreement (NAFTA) aimed to expand world trade by reducing trade barriers and enhancing cooperation.

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NAFTA's Economic Impact

NAFTA led to job transfers from the U.S. and Canada to Mexico, lowering production costs but also causing food poverty in Mexico. It had a modest positive impact on U.S. GDP.

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Who Funds IMF and World Bank?

The richest countries contribute the most funding to the IMF and World Bank, giving them significant influence over decisions.

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NAFTA's Positive Effects

NAFTA led to lower prices, quadrupled trade between the three countries, created 5 million U.S. jobs, and opened opportunities for small businesses.

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IMF's Example

In 2012, Yemen received a $93 million loan from the IMF to combat terrorism and stabilize its economy.

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World Bank's Criticism

The World Bank has faced criticism for lending to corrupt governments and dictators.

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Study Notes

Contemporary World (Midterm Reviewer)

  • The 8 Millennium Development Goals (MDGs) were created in the 1990s to address global challenges.
  • Goal 1: Eradicate extreme poverty and hunger
  • Goal 2: Achieve universal primary education
  • Goal 3: Promote gender equality and empower women
  • Goal 4: Reduce child mortality
  • Goal 5: Improve maternal health
  • Goal 6: Combat diseases like HIV/AIDS and malaria
  • Goal 7: Ensure environmental sustainability
  • Goal 8: Develop a global partnership for development

HIV/AIDS

  • HIV stands for Human Immunodeficiency Virus
  • AIDS stands for Acquired Immunodeficiency Syndrome

Extreme Poverty

  • Extreme poverty is defined as living on less than $1.25 a day, characterized by severe deprivation of basic human needs.
  • By 2030, the World Bank predicts extreme poverty could fall to less than 400 million, provided continued improvement.

Economic Globalization

  • Increased interdependence of world economies.
  • Key aspects include cross-border trade, capital flows, and technology spread.

Protectionism vs. Trade Liberalization

  • Protectionism: Government intervention in foreign trade to encourage domestic production, often through tariffs and quotas (e.g., during mercantilism and the Great Depression).
  • Trade Liberalization: Promotes free trade, allowing goods and services to move more freely across borders (often influenced by post-World War II policies). Examples of countries accused of practicing protectionism include China, Japan, and the USA.

Mobile Phones and Leapfrogging

  • Mobile phones are a transformative technology bridging access to banking, education, and markets, especially crucial for developing nations.
  • "Leapfrogging" refers to countries skipping traditional stages of development and directly adopting more modern or efficient technologies.

Fair Trade

  • Promotes just prices, safe working conditions, and environmental sustainability, particularly for small, marginalized producers like coffee and chocolate farmers.
  • International Fair Trade Association promotes fair trade.

Sustainable Development

  • Aims to balance economic growth with environmental sustainability, using earth’s resources today while preserving them for future generations.
  • Key goals include turning waste into fuel, ending poverty, and ensuring sustainable agriculture.

Multi-Dimensional Relationships in Globalization

  • Globalization encompasses several interconnected aspects, including economics, politics, and technology.

Sustainable Development Goals (SDGs)

  • A global call to action to end poverty, protect the planet, and ensure prosperity for all.

Environmental Degradation

  • A process that compromises the natural environment, decreasing biodiversity and negatively impacting the overall health of the environment.
  • Examples include deforestation, pollution, and industrial activities.
  • Causes include industrial activities (significant carbon emissions leading to global warming and climate change), deforestation and pollution, and production/disposal of consumer goods).

Food Security

  • Defined as the ability of everyone to access enough nutritious food considering the varied dietary needs and food preferences.
  • Key components include availability, accessibility, adequacy, acceptability, and agency.

Global Responses to Environmental Challenges

  • Various efforts to tackle climate change, such as carbon taxes and carbon neutrality initiatives are being explored.
  • Alternative energy sources, like biofuels, are researched alongside efforts to address localized environmental problems.

Global Inequality

  • The unequal distribution of resources, opportunities, and power around the world.
  • Types include wealth inequality (distribution of assets) and income inequality (distribution of earnings).

Globalization

  • The rapid integration of countries through economics, cultures, and societies.
  • This is both positive (progress in certain areas), and negative (poverty, lack of access to resources, inequality)

Global Cities

  • Major urban centers are hubs in the global economy, including New York City, London, Paris, Tokyo, Beijing, Singapore, and Los Angeles.

World Systems Theory

  • Capitalism is based on unequal relationships between core, semi-periphery, and periphery nations. It suggests that development and disparities are outcomes of these relationships.

International Financial Institutions

  • Includes the IMF (promoting financial stability through support for countries facing economic crises), World Bank (assisting development and reducing poverty), and WTO (facilitating international trade agreements).

Bretton Woods System

  • Aimed at establishing peace and avoiding economic turmoil after World Wars I and II, by creating institutions to support free trade and money exchange stability.

NAFTA

  • The North American Free Trade Agreement sought to reduce trade barriers among the US, Canada, and Mexico.
  • This led to shifts in manufacturing, with some job losses in the US, and changes in consumer price markets.

Organisation for Economic Co-operation and Development (OECD)

  • comprises 38 member countries, largely considered wealthy and developed nations, influential due to their economic power.

Organization of Petroleum Exporting Countries (OPEC)

  • An organization of major oil-producing countries (e.g., Saudi Arabia, Iraq, etc). Aims to influence and coordinate oil production and pricing.

World Trade Organisation (WTO)

  • Aims to promote trade liberalization and resolve trade disputes.
  • Focused on reducing trade barriers, however, criticisms include potential negative impacts on less developed countries when faced with competition from more developed nations and the influence of large trading powers.

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Contemporary World Midterm Reviewer PDF

Description

This quiz covers key global challenges addressed by the 8 Millennium Development Goals (MDGs), including poverty, education, gender equality, and health. It also explores the impact of HIV/AIDS and the implications of economic globalization on world economies. Test your knowledge on these pressing issues in today's contemporary world.

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