Economic Globalization and Key Theorists
53 Questions
0 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What primarily contributed to the Third World countries being unable to repay their debts?

  • A decrease in the import of manufactured goods.
  • The sudden increase in population.
  • The establishment of a stable government.
  • The increased value of the U.S. dollar along with rising oil prices. (correct)

    • Which of the following is a consequence of the Third World countries focusing on cash crops?

  • A decrease in agricultural land use.
  • An increase in food self-sufficiency.
  • Exporting food while experiencing local food shortages. (correct)
  • A diversion of funds to military projects.

    • How does the International Monetary Fund (IMF) assist countries dealing with debt?

  • Only by supplying food aid.
  • By eliminating all debts without repayment.
  • Through the implementation of strict adherence to specific programs. (correct)
  • By providing unconditional financial support.

    • What primarily backed the Third World countries’ need to borrow money post-World War II?

    <p>Increasing manufactured goods prices without a corresponding rise in raw material prices.</p> Signup and view all the answers

    What are the International Monetary Fund (IMF) and World Bank primarily structured to do?

    <p>Support struggling Third World countries financially.</p> Signup and view all the answers

    Which of the following is an effect of the agricultural focus shift in Third World countries?

    <p>Dependence on foreign companies for profits from cash crops.</p> Signup and view all the answers

    How long do countries need to abide by IMF programs to receive debt relief?

    <p>Six years.</p> Signup and view all the answers

    What has led to malnutrition and famine in some Third World countries?

    <p>Export of food to First World countries while lacking local resources.</p> Signup and view all the answers

    What factor contributed to the outbreak of World War I?

    <p>Desire of imperial powers to protect or expand colonies and trade</p> Signup and view all the answers

    What was one economic consequence of World War I for Europe?

    <p>Destruction of European cities, towns, and farms</p> Signup and view all the answers

    How did Joseph Stalin's methods contrast with capitalist beliefs?

    <p>Stalin exerted complete control over the economy.</p> Signup and view all the answers

    What economic philosophy did Milton Friedman advocate?

    <p>Maximum freedom for individuals in economic choices.</p> Signup and view all the answers

    Which leaders were influenced by Milton Friedman’s economic ideas?

    <p>Ronald Reagan and Margaret Thatcher</p> Signup and view all the answers

    What major economic trend has occurred since the end of World War II?

    <p>Advancement of trade liberalization and lower tariffs</p> Signup and view all the answers

    What is a major benefit associated with trade liberalization for developing countries?

    <p>Development of a comparative advantage in specific products</p> Signup and view all the answers

    Which economist is credited with the theory of comparative advantage?

    <p>David Ricardo</p> Signup and view all the answers

    What assertion does comparative advantage make regarding international trade?

    <p>Countries should specialize in products they can produce more efficiently.</p> Signup and view all the answers

    Despite trade liberalization, why do many countries still remain poor?

    <p>Lack of resources and industrial capacity</p> Signup and view all the answers

    What distinguishes cash crops from subsistence crops?

    <p>Cash crops have export value and attract demand.</p> Signup and view all the answers

    What does 'debt servicing' refer to?

    <p>The repayment of interest and principal to external creditors.</p> Signup and view all the answers

    Which of the following best defines globalization?

    <p>The process of economic interdependence among countries.</p> Signup and view all the answers

    What is a key characteristic of infrastructure in a community?

    <p>It encompasses basic services needed for societal functioning.</p> Signup and view all the answers

    What does liberalization in economic policy typically entail?

    <p>Relaxation of government restrictions.</p> Signup and view all the answers

    Which statement accurately describes the North in economic terms?

    <p>Comprising wealthy, industrialized, first-world countries.</p> Signup and view all the answers

    What does privatization mean in an economic context?

    <p>The sale of government-owned enterprises to private entities.</p> Signup and view all the answers

    What is the primary purpose of Structural Adjustment Programs (SAPs)?

    <p>To implement policy changes required to receive loans.</p> Signup and view all the answers

    What is the primary aim of protectionism?

    <p>To protect domestic industries from foreign competition.</p> Signup and view all the answers

    Which policy is an example of protectionism?

    <p>Tariffs on imported goods.</p> Signup and view all the answers

    What is a criticism of protectionism?

    <p>It allows higher prices for locally produced goods.</p> Signup and view all the answers

    Which idea supports the belief that globalization is beneficial?

    <p>Enhancing global trade literacy.</p> Signup and view all the answers

    What role did the Bretton Woods Conference play in global economics?

    <p>It mapped out the creation of the IMF and World Bank.</p> Signup and view all the answers

    What did John Maynard Keynes argue regarding government involvement in the economy?

    <p>Government intervention is necessary during economic distress.</p> Signup and view all the answers

    What is the main purpose of the General Agreement on Tariffs and Trade (GATT)?

    <p>To reduce tariffs and trade barriers among member countries.</p> Signup and view all the answers

    What is a cash crop?

    <p>A crop cultivated for income through export.</p> Signup and view all the answers

    How does the World Bank aim to help developing countries?

    <p>By funding infrastructure projects and reducing poverty.</p> Signup and view all the answers

    Which characteristic is shared by both the IMF and the World Bank?

    <p>They aim to stabilize international economic affairs post-WWII.</p> Signup and view all the answers

    What are the implications of imposing import substitution policies?

    <p>They can lead to reduced choices for consumers.</p> Signup and view all the answers

    What was Friedrich Hayek's stance on government control of markets?

    <p>He believed in minimal government involvement to protect competition.</p> Signup and view all the answers

    What is the primary goal of corporate diplomacy as described in the content?

    <p>To localize businesses and integrate them into communities.</p> Signup and view all the answers

    What is a primary consequence of Structural Adjustment Programs (SAPs) on social services?

    <p>Cutbacks in all forms of social spending</p> Signup and view all the answers

    What do SAPs typically promote regarding government presence in the economy?

    <p>Less government intervention in the economy</p> Signup and view all the answers

    How do Structural Adjustment Programs impact local currencies?

    <p>They mandate devaluation of local currencies</p> Signup and view all the answers

    What is a potential negative outcome of prioritizing export production over food crops?

    <p>Higher malnutrition rates</p> Signup and view all the answers

    What does the term 'Institute of Misery and Famine' refer to?

    <p>The IMF in the context of 3rd world countries</p> Signup and view all the answers

    Which of the following is NOT a type of SAP?

    <p>Promotion of local product subsidies</p> Signup and view all the answers

    How can SAPs affect the agricultural sector in 3rd World countries?

    <p>Promoting cash crops for export</p> Signup and view all the answers

    What is a likely effect of eliminating price controls on basic foodstuffs?

    <p>Higher prices making food unavailable to the poor</p> Signup and view all the answers

    What challenge do farmers in the 3rd World face when competing with those in the North?

    <p>Government subsidies protecting Northern farmers</p> Signup and view all the answers

    What is one criticism of the global trading system mentioned in the content?

    <p>It benefits industrialized nations at the expense of the South</p> Signup and view all the answers

    What is one of the intentions behind the wage freezes enforced by SAPs?

    <p>To attract foreign investment by lowering labor costs</p> Signup and view all the answers

    What is the implication of the phrase 'spend less, export more' in the context of SAPs?

    <p>Countries should minimize spending to balance budgets while boosting exports</p> Signup and view all the answers

    What effect do commodity price settings by Northern countries have on Southern economies?

    <p>They lead to lower profits for Southern exporters</p> Signup and view all the answers

    What is a direct impact of privatizing government-owned enterprises due to SAPs?

    <p>Layoffs and wage cuts for workers</p> Signup and view all the answers

    Study Notes

    Economic Globalization

    • 20th century world events shaped contemporary economic globalization
    • One factor leading to World War I was imperial powers wanting to protect or expand their colonies and trade
    • Economic costs of World War I included destruction of European cities, towns, and farms; many European governments borrowed from the U.S. and were in debt
    • Communism is complete government control
    • Joseph Stalin transformed the Soviet Union into a superpower by controlling the government
    • Capitalists oppose Stalin's methods because they support limited government

    Karl Marx

    • Born May 5, 1818, in the Kingdom of Prussia

    Milton Friedman

    • Modern-day supporter of Adam Smith's idea of government non-involvement in the economy
    • Believes less government regulation leads to greater individual prosperity
    • Advocates for maximum freedom in personal economic choices, leading to maximum economic, political, and social freedom
    • Believes government's role is to not support people through tough economic times, emphasizing self-reliance

    Trade Liberalization and Comparative Advantage

    • Economic trend since World War II
    • Lower tariffs encourage trade
    • No country has achieved economic success without being open to trade
    • Lower tariffs reduced poverty by 14% between 1993 and 1998
    • Countries like India, Vietnam, and Uganda have experienced growth and poverty reduction due to trade liberalization
    • Developed a comparative advantage in producing certain products, attributed to British economist David Ricardo in 1817

    Protectionism

    • Also known as economic nationalism and economic patriotism
    • Generally opposes globalization
    • Supports domestic industries and limits competition
    • Implements policies like import substitution (restrictions on imports to support domestic production)

    Education and Innovation

    • Education needs to align with the global marketplace, prioritizing training for in-demand skills
    • Make global trade literacy a priority
    • Innovation should be embraced by adapting and accepting globalization.
    • This is crucial in creating new jobs

    Globalization of Global Economics and Development

    • Bretton Woods conference in 1944 aimed to prevent future economic crises
    • Led to creation of the IMF and World Bank to expand international trade
    • Supporters advocate for free trade and minimal government involvement
    • Opponents highlight detrimental effects of globalization for developing nations

    Trade Liberalization

    • Developed countries benefit from exporting manufactured goods to 3rd world countries
    • Some developed countries protect their agriculture sectors through tariffs and subsidies.
    • World Trade Organization (WTO) emerged as a successor to GATT
    • It regulates trade in services, goods, and intellectual property.
    • Established to help countries in economic trouble.
    • Aims to establish stable financial footing after World War II.

    Services

    • Structural Adjustment Programs (SAPs) - loans to countries for economic reforms
    • Public services, like healthcare, become a direct function of the government.
    • Subsidies - financial assistance to support businesses in the public interest.

    Cash Crops

    • Crops grown to be exported, not consumed locally
    • Often controlled by foreign companies
    • Resulting profits often leave the host country

    Debt Servicing

    • Repayment of loans, interest, and principle to external creditors
    • Frequently leads to economic hardship in developing countries

    Devaluation

    • Reduces the value of a country's currency
    • Makes exports cheaper and imports more expensive

    Third World Debt Crisis

    • IMF and World Bank assist struggling nations
    • World trade was directed by economic policy of 1st world nations, often at the expense of 3rd world nations
    • Countries may have to export natural resources to fund debt servicing.

    Studying That Suits You

    Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

    Quiz Team

    Related Documents

    Unit 2 - Economic Globalization PDF

    Description

    This quiz explores the influence of 20th century events on economic globalization and evaluates the thoughts of prominent theorists like Karl Marx and Milton Friedman. Understand how World War I affected European economies and delve into the contrasting views on government involvement in the economy. Test your knowledge on these foundational concepts shaping modern economics.

    More Like This

    Economic Globalization and Indicators Quiz
    32 questions

    Economic Globalization and Indicators Quiz

    ExpansiveElectricOrgan avatar
    ExpansiveElectricOrgan
    Economic Globalization Flashcards
    10 questions

    Economic Globalization Flashcards

    WellRunHydrogen avatar
    WellRunHydrogen
    Economic Globalization Pros & Cons Flashcards
    8 questions

    Economic Globalization Pros & Cons Flashcards

    PromisingStonehenge avatar
    PromisingStonehenge
    Trends in Economic Globalization
    40 questions

    Trends in Economic Globalization

    PanoramicMothman avatar
    PanoramicMothman
    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser