International Trade and Poverty Quiz

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Questions and Answers

What is the primary purpose of protectionist trade restrictions imposed by governments?

To encourage foreign investment

To eliminate trade agreements

To reduce tariffs on imports

To protect local employment (correct)

What did the General Agreement on Tariffs and Trade (GATT) aim to achieve?

Establish a single global currency

Impose stricter tariffs on imports

Reduce tariffs and other trade barriers (correct)

Increase protectionism among member countries

In what year did the World Trade Organization (WTO) replace GATT?

1995 (correct)

2000

1980

2005

What does comparative advantage describe?

A country's ability to produce goods at a lower cost than others Signup and view all the answers

Which of the following terms refers to the tariff imposed on certain imported vehicles to protect U.S. automakers?

Chicken Tax Signup and view all the answers

What characterizes extreme poverty according to the UN?

Severe deprivation of basic human needs Signup and view all the answers

Which of the following is NOT a feature of the core economy?

Less dependent on global trends Signup and view all the answers

What is the projected outcome for extreme poverty by 2030 according to the World Bank?

Fall to less than 400 million people Signup and view all the answers

What issue complicates the improvement of global poverty according to the content?

Climate change Signup and view all the answers

Which of the following groups are described as 'weak states'?

Nations reliant on core countries Signup and view all the answers

What was the significant achievement reported by the UN regarding extreme poverty?

A decrease in the number of individuals living in extreme poverty Signup and view all the answers

How much does the UN define as the poverty threshold for living in poverty?

100,534 pesos a year Signup and view all the answers

What is a challenge faced by individuals who have escaped extreme poverty?

Normalization of income inequality Signup and view all the answers

What is the greatest contributor to economic globalization?

Economic globalization Signup and view all the answers

Which option best describes economic globalization?

It represents a qualitative transformation of the global economy. Signup and view all the answers

Which of the following aspects does NOT contribute to economic globalization?

Increased national trade barriers Signup and view all the answers

According to Szentes, what does globalization create?

An organic system of world economy Signup and view all the answers

What role has globalization redefined for the nation-state?

An effective manager of the national economy Signup and view all the answers

Which of the following is NOT a dimension of economic globalization?

Globalization of cultural practices Signup and view all the answers

What are Transnational Corporations (TNCs) characterized by in the context of economic globalization?

Their evolution as major players in the global economy Signup and view all the answers

What does economic globalization refuse to assume about the nation-state?

That it is the only unit of analysis Signup and view all the answers

What is the primary goal of protectionism?

To encourage domestic production through government intervention Signup and view all the answers

Which of the following best defines trade liberalization?

A practice of allowing the unrestricted import and export of goods Signup and view all the answers

What effect do tariffs typically have on the demand for imported goods?

They decrease the demand for imported goods Signup and view all the answers

What is a quota in the context of economic protectionism?

A restriction on the volume of specific imports over a set period Signup and view all the answers

How do subsidies impact the relationship between consumer and producer prices?

They create a situation where consumers pay less than producers receive Signup and view all the answers

What is the function of standardization in the context of protectionism?

To enforce compliance of foreign products to specific guidelines Signup and view all the answers

Which of the following is NOT a tool of protectionism?

Free trade agreements Signup and view all the answers

What consequence does imposing tariffs on imports typically lead to?

Higher prices leading to decreased demand for imports Signup and view all the answers

Study Notes

Structuring the Economy

The presentation discusses the structuring of the economy, likely focusing on the Philippines' role within a global economic context.

Economic Globalization and Global Trade

Definition: Economic globalization is a historical process driven by human innovation and technological advancements. It results in increasing integration among economies worldwide, facilitated by the movement of goods, services, and capital across borders.
Dimensions: Economic globalization encompasses four key dimensions:
- Globalization of trade (goods and services).
- Globalization of financial and capital markets.
- Globalization of technology and communication.
- Globalization of production.

Protectionism

Definition: Protectionism is a trade policy involving systematic government intervention to support domestic industries. This support involves favoring domestic producers through preferential treatment and discrimination against foreign competitors.
Types:
- Tariffs: Taxes/duties on imports, increasing import prices, hence reducing demand for imported goods.
- Quotas: Restrictions on import volumes, a non-tariff trade barrier. This decreases supply, increasing prices.
- Subsidies: Government grants/tax credits to domestic producers, creating a price difference between consumer and producer costs.
- Standardization: Government requirements for foreign products to adhere to certain guidelines, often reducing foreign product appeal.

Free Trade

Agreements: Examples like NAFTA (North American Free Trade Agreement), and GATT (General Agreement on Tariffs and Trade), aiming to reduce tariffs and barriers among signatory countries.
WTO (World Trade Organization): GATT was replaced by WTO in 1995; today, 164 countries account for 98% of global trade.
Importance of the 'Chicken Tax': A 25% tariff on certain imports, an example of protectionism (imposed by Lyndon B. Johnson in 1963).

Comparative Advantage and Benefits

Comparative advantage: All countries benefit from free trade cooperation. Ricardo's work emphasizes the ability of countries to produce certain goods and provide services at a lower cost.

Business and Government Goals

Conflicting goals: Business aims to maximize profit, while governments seek to safeguard their citizens' well-being. Neither total free trade nor complete protectionism effectively accomplishes both.

Millennium Development Goals (MDGs) & Sustainable Development Goals (SDGs)

MDGs (Millennium Development Goals): Introduced by the UN in 2000, with eight goals to address global problems.
SDGs (Sustainable Development Goals): Introduced after MDGs, focusing on social, economic, and environmental sustainability.
Key differences:
- MDGs: Simpler, single set of goals, predominantly focused on developing countries.
- SDGs: Universal goals, encompassing all nations, with three dimensions (economic, social, and environmental). Prioritizes issues and needs across the world including both developing and developed nations.

Poverty

Standards of living: Different standards of living exist worldwide, thus influencing the meaning of poverty and the definition/application.
Current poverty threshold: The UN defines poverty as extreme deprivation of essential needs; 275 pesos per day or 100,534 pesos per year. In 2015, 836 million people were living in extreme poverty. The number is expected to drop to <400M by 2030, but climate change is a threat.

Other Key Concepts

Core, Semi-Periphery, Periphery: Categories used to analyze the global economy. Countries in the periphery may be dependent on the core, and demonstrate labor-intensive production compared to those in the core with more advanced skill & capital intensive production.

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Description

Test your knowledge on the fundamentals of international trade, including trade restrictions and agreements like GATT and WTO. Explore the concepts surrounding comparative advantage and the characteristics of extreme poverty as defined by the UN. This quiz aims to deepen your understanding of economic policies and global poverty issues.