Global Economy and Specialization Quiz

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Questions and Answers

What is the primary role of the International Court of Justice?

To enforce economic sanctions.

To settle legal disputes between states. (correct)

To mediate conflicts through military intervention.

To oversee humanitarian efforts.

How many Trust Territories achieved independence in 1994?

11 (correct)

What is the Security Council primarily responsible for?

Managing global health crises.

Conducting environmental treaties.

Economic development.

Authorizing military interventions. (correct)

Which chapter of the UN Charter concerns collective military security?

Chapter VII Signup and view all the answers

What aspect of governance is described as fragmented and complex?

Global governance. Signup and view all the answers

Which organ of the UN serves as the principal judicial organ?

The International Court of Justice Signup and view all the answers

What is one of the key questions raised regarding global governance reform?

How to reform institutions. Signup and view all the answers

How often does the council overseeing Trust Territories meet?

Suspended, will meet when necessary. Signup and view all the answers

What does an economy that rises above borders and is free moving imply?

Diminished role of governments in economic matters Signup and view all the answers

What is the primary advantage of specialization in production?

Increased contribution to overall production Signup and view all the answers

Which of the following best describes international specialization?

Focusing on high volume production of a small range of products Signup and view all the answers

What is a potential outcome of mass production in the context of trade?

Surplus of goods available for export Signup and view all the answers

Why do countries engage in trade?

To access resources they do not possess Signup and view all the answers

What role does the division of labor play in specialization?

It allows producers to focus on specific roles Signup and view all the answers

What does specialization NOT directly lead to in an economy?

Uniform production methods Signup and view all the answers

What is a consequence of specialization on the global economy?

It highlights the need for imports from specialized countries Signup and view all the answers

What was a significant economic event that marked the beginning of the economic crisis?

The Wall Street Crash of 1929 Signup and view all the answers

What is the primary function of the United Nations as described?

To promote global security Signup and view all the answers

What system was established during the Bretton Woods Conference in 1994?

Dollar-gold standard Signup and view all the answers

How many member countries does the United Nations currently count?

193 Signup and view all the answers

What are the Sustainable Development Goals aimed at?

Creating common goals for the collective future Signup and view all the answers

Which council was established to manage international legal issues?

International Court of Justice Signup and view all the answers

What is an essential role of the UN's Secretariat?

To execute key decisions of the UN Signup and view all the answers

What body is composed of 54 elected members serving overlapping terms?

Trusteeship Council Signup and view all the answers

What is the main goal of protectionism?

To preserve jobs in certain domestic industries Signup and view all the answers

What is one potential downside of protectionist policies?

They can make the economy poorer overall Signup and view all the answers

How does free trade affect the economy according to the content?

It increases the size of the economy as a whole Signup and view all the answers

What can protectionism help build up in the economy?

New industries with high start-up costs Signup and view all the answers

What is an example of a 'strategic' industry mentioned in the content?

Energy production Signup and view all the answers

What is a potential reason for implementing tariffs on imports?

To support local farmers and increase their market competitiveness Signup and view all the answers

What might be a consequence of imposing limits on agricultural imports?

Higher food prices in the domestic market Signup and view all the answers

What does the term 'food security' relate to in the context of protectionism?

Ensuring a reliable domestic food supply in emergencies Signup and view all the answers

What is a potential consequence of over-specialization in international trade?

Job loss for workers if global demand declines Signup and view all the answers

What does the product life-cycle theory explain?

The development stages of goods in certain markets Signup and view all the answers

Which of the following best describes the New Trade Theory developed by Paul Krugman?

It argues that the world market can support only a limited number of firms. Signup and view all the answers

What factor does Michael Porter emphasize as crucial for a nation's competitive advantage?

The importance of domestic demand and rivalry Signup and view all the answers

Which approach advocates for unrestricted movement of goods and services between countries?

Free trade Signup and view all the answers

What is a likely reason for countries to impose trade restrictions?

To protect certain domestic jobs Signup and view all the answers

What does the Heckscher–Ohlin theory focus on?

The role of factor endowments in international trade patterns Signup and view all the answers

How might cheaper imports impact local producers?

They may lead to market destruction for local products Signup and view all the answers

Study Notes

Global Economy

A global economy defies borders and governments.
It raises questions about the role of governments in a globalized world.
Countries are playing a diminished role in their own economies.

Globalization

Results from: development of an economy that transcends borders.
Impacts:
- Openly questioned the role of governments.
- Diminished influence of states on their own economies.

Specialization

Definition: The division of labor, where workers, producers, firms, or countries focus on specific tasks.
Benefits:
- Efficiency and productivity gains.
- Increased contribution to the overall production process.

International Specialization

Definition: Countries utilize scarce resources to produce a limited range of products in high volume.
Benefits:
- Mass production and surplus goods for export.
- Promotes international trade as countries import goods they don't specialize in.

Why Countries Trade

Countries trade when they lack resources or capacity to meet their own needs and wants.

The Pattern of International Trade

Explores theories that explain international trade patterns.
Focuses on the contributions of Adam Smith, David Ricardo, and Heckscher-Ohlin.

Trade: Free Trade vs. Protectionism

Free Trade: Encourages the free movement of goods and services between countries, promoting economic growth.
Protectionism: Restricts trade for objectives like protecting jobs, safeguarding strategic industries, and supporting new industries.

Arguments for Free Trade

Increases the overall size of the economy.
Promotes efficient production based on resource allocation.
Facilitates global economic growth.

Challenges of International Trade

Over-specialization risks job losses when demand falls.
Domestic industries can decline due to foreign competition.
New industries struggle against established foreign firms.
Local producers face competition from cheaper imports.

Theories of International Trade

Heckscher-Ohlin Theory: Explains trade patterns based on factor endowments (e.g., land, labor, capital).
Product Lifecycle Theory: Explains the evolution of trade patterns over a product's lifecycle.
New Trade Theory: Emphasizes that the world market can only support a limited number of firms in certain industries, leading to first-mover advantages.
Porter's Theory of National Competitive Advantage: Highlights the importance of domestic demand and industry rivalry in determining a nation's success.

The United Nations

Prime organization for international cooperation, peace, and security.
Authorizes the use of force against aggressors.
Primary focus on ensuring global security.
Facilitates peaceful dispute resolution between member states.
Aims to ensure shared prosperity through a range of agencies and institutions.
Articulated the Sustainable Development Goals in 2015.

UN Organs

General Assembly: Makes recommendations through its 193 members.
Security Council: The most powerful organ with legally binding resolutions.
International Court of Justice: Settles legal disputes and provides legal opinions.
Secretariat: Implements UN decisions, led by the Secretary-General.
Economic and Social Council (ECOSOC): Coordinates UN's economic and social work.
Trusteeship Council: Provided international supervision of Trust Territories but is now suspended.

Global Governance

Complex and fragmented.
Key questions are:
- How to reform existing institutions?
- How to develop alternative institutions?
- How to leverage technology for better governance?

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Description

Test your knowledge on the global economy, its implications for government roles, and the concept of specialization within international trade. Understand how countries engage in effective production and the effects of globalization on their economies. Explore the benefits and challenges posed by these economic structures.