International Political Economy Overview
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Questions and Answers

What is the study of the politics of international economic activities called?

  • International Political Economy (correct)
  • Mercantilism
  • Liberalism
  • Marxism

    • What does mercantilism emphasize in international relations?

    Each state must protect its own interests at the expense of others.

    Liberalism promotes the idea that states can mutually benefit from economic exchanges.

    True

    What is the concept of economic exploitation in relation to Marxism?

    <p>Economic exploitation shapes political relations.</p> Signup and view all the answers

    What is the definition of bargaining space?

    <p>Difference between the lowest price a seller would accept and the highest price a buyer would pay.</p> Signup and view all the answers

    What does market price refer to?

    <p>Established fairly uniform price.</p> Signup and view all the answers

    What are demand and supply curves related to?

    <p>High price, low demand; low price, high demand; and vice versa for supply.</p> Signup and view all the answers

    What is the balance of trade?

    <p>Value of a state's imports relative to its exports.</p> Signup and view all the answers

    What is comparative advantage?

    <p>States differ in their abilities to produce certain goods due to resources and other factors.</p> Signup and view all the answers

    What does autarky refer to?

    <p>Avoiding trade and producing everything a state needs to become self-reliant.</p> Signup and view all the answers

    What is dumping in international trade?

    <p>Moving products to foreign markets at below-minimum profit prices.</p> Signup and view all the answers

    What is a tariff?

    <p>Tax on a certain type of imported good.</p> Signup and view all the answers

    What are subsidies?

    <p>Payments by a government to a domestic industry to lower prices without losing money.</p> Signup and view all the answers

    What is economic nationalism?

    <p>Use of economics to influence international power and standing.</p> Signup and view all the answers

    What is the World Trade Organization?

    <p>Global, multilateral IGO that promotes and adjudicates international trade.</p> Signup and view all the answers

    What does the Most Favored Nations Concept entail?

    <p>Trade restrictions by a WTO member must be applied equally to all WTO members.</p> Signup and view all the answers

    What is the Generalized System of Preferences?

    <p>Exceptions allowing rich states to give trade concessions to poor states.</p> Signup and view all the answers

    What are bilateral treaties?

    <p>Treaties covering trade with reciprocal arrangements to lower barriers.</p> Signup and view all the answers

    What is meant by free trade?

    <p>Agreement to remove most or all trade barriers within a specified area.</p> Signup and view all the answers

    What is a cartel?

    <p>Association of producers or consumers formed to manipulate market prices.</p> Signup and view all the answers

    What is industrial policy?

    <p>Working with industries to promote growth and tailor trade policy.</p> Signup and view all the answers

    What are intellectual property rights?

    <p>Rights of creators to receive royalties from their products.</p> Signup and view all the answers

    Study Notes

    International Political Economy

    • Examines the intersection of politics and economics at a global level, focusing on trade, monetary relations, and the role of multinational corporations.

    Mercantilism

    • Advocates for a state-centric approach emphasizing protection of national interests, prioritizing relative wealth over mutual advantages from international cooperation.

    Liberalism

    • Centers on cooperation to enhance collective economic benefits, highlighting the importance of international organizations in fostering trade and enhancing states' absolute wealth.

    Marxism

    • Views economic exploitation as the core determinant of political relationships and power dynamics within the international sphere.

    Bargaining Space

    • Defined as the range between the lowest acceptable price for sellers and the highest acceptable price for buyers in a transaction.

    Market Price

    • Refers to the price point where goods are sold consistently in the marketplace, leading to standardized pricing.

    Curves

    • Demand is inversely related to price: higher prices lead to lower demand. Conversely, supply is positively related to price: higher prices incentivize increased supply. The point where demand and supply intersect determines the equilibrium price.

    Balance of Trade

    • The comparative value of a state's imports against its exports. A trade surplus occurs when exports exceed imports, while a trade deficit arises when imports surpass exports.

    Comparative Advantage

    • Highlights disparities in production capabilities among states due to variations in resources, labor characteristics, technology, and other factors that determine efficiency.

    Autarky

    • Describes an economic system where a country minimizes or eliminates trading with others, aiming for complete self-sufficiency.

    Dumping

    • The practice of selling goods in a foreign market at prices lower than the domestic market or below production costs.

    Tariff (Duty)

    • A tax imposed on specific categories of imported goods as a means to protect domestic industries and generate revenue.

    Subsidies

    • Financial assistance provided by governments to domestic industries, enabling them to reduce prices without incurring losses through loans or tax exemptions.

    Economic Nationalism

    • Utilizes economic strategies to enhance a state's international power and status, reflecting a focus on national interests.

    World Trade Organization (WTO)

    • An international organization that regulates and facilitates global trade, managing trade agreements and resolving disputes among member states. It evolved from the General Agreement on Tariffs and Trade (GATT).

    Most Favored Nations Concept

    • Mandates that any trade advantages granted by a WTO member to one partner must also be extended to all WTO members, promoting non-discriminatory trade practices.

    Generalized System of Preferences (GSP)

    • An exception allowing developed nations to offer trade concessions to developing countries to support their economic growth and development.

    Bilateral Treaties

    • Agreements between two countries designed to create reciprocal trade benefits by reducing barriers to trade between them.

    Free Trade

    • An agreement aimed at eliminating most or all trade restrictions, as seen in trade pacts like NAFTA.

    Cartel

    • An association of producers or consumers forming a coalition to influence the pricing of a product, with OPEC being a notable example in the oil sector.

    Industrial Policy

    • A governmental strategy to actively support domestic industries through tailored trade policies and targeted assistance to foster growth.

    Intellectual Property Rights

    • Legal rights granted to creators of artistic and intellectual works, ensuring they receive royalties from the sale of their products, crucial for innovation and creative industries.

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    Description

    This quiz covers key concepts in International Political Economy, including mercantilism, liberalism, and Marxism. It explores the dynamics of global trade, monetary relations, and the influence of multinational corporations. Test your understanding of bargaining space and market price as well.

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