12 Questions
What is the primary function of the primary sector in the Three Sectors of Production?
Extracting raw materials
What was the main goal of the Bretton Woods System?
To restructure the world economy and ensure global financial stability
What is the purpose of the General Agreement on Tariffs and Trade (GATT)?
To facilitate multinational trade agreements
What is the name of the international organization that replaced GATT?
World Trade Organization (WTO)
What is the core idea of neoliberalism in international trade?
Reducing trade barriers benefits all nations
Why were International Financial Institutions created?
As a result of peace advocacy after World War II
What is the primary goal of the World Bank?
To eradicate poverty
What is the main reason why companies outsource production to other countries?
To reduce labor costs and take advantage of weak government regulation
What was the result of the Agricultural Revolution?
The growth of permanent settlements, trade networks, and population growth
What is a key feature of capitalism?
Private ownership of production and profit maximization
What was the outcome of the Industrial Revolution?
An increase in population growth and standards of living
What inspired the formation of labor unions in the late 19th century?
Karl Marx's principles
Study Notes
Social Institutions
- Economy is one of the biggest impacts on society
- Family, Church, Government, and School are all social institutions
Sectors of Production
- Primary Sector: extracts raw materials
- Secondary Sector: transforms raw materials into finished products
- Tertiary Sector: services are more involved than products
Bretton Woods System
- Established to restructure the world economy and ensure global financial stability
- Five key elements:
- Currency expressed in terms of gold
- Official monetary authority in each country
- An overseer for exchange rates
- Eliminating restrictions on currencies in international trade
- US dollar became the global currency
International Trade Organizations
- GATT (General Agreement on Tariffs and Trade):
- Established in 1947
- Forum for representatives from 23 member countries
- Focused on trade goods through multinational trade agreements
- WTO (World Trade Organization):
- Headquartered in Geneva, Switzerland
- 152 member states as of 2008
- Independent multilateral organization
- Focus on non-tariff-related barriers to trade and trade liberalization
- Neoliberalism: reducing or eliminating barriers to benefit all nations
International Financial Institutions
- IMF (International Monetary Fund):
- Goal: to help countries in trouble
- Served as a lender or last resort for countries needing financial assistance
- WB (World Bank):
- Goal: eradication of poverty
- Funded specific projects to help poor countries
- Long-term approach
NAFTA and Outsourcing
- NAFTA: North America Free Trade Agreement
- Trade pact between the US, Mexico, and Canada
- Established on January 1, 1994
- Goal: increase cooperation to improve working conditions and reduce barriers to trade
- Outsourcing: moving production to countries with low labor costs, weak government regulation, and low raw materials
OPEC and Agricultural Revolution
- OPEC: Organization of Petroleum Exporting Countries
- Originally comprised of Saudi Arabia, Iraq, Kuwait, and Venezuela
- Formed to increase the price of oil
- Current members: UAE, Algeria, Libya, Qatar, Nigeria, and Indonesia
- Agricultural Revolution:
- People learned to domesticate plants and animals
- Farming helped build surpluses
- Three major developments: permanent settlements, trade networks, and population growth
Industrial Revolution
- Result: steam engines, manufacturing, and mass production
- Factories changed how work functioned
- Productivity increased
- Standards of living rose
- People had access to a wider variety of goods
Economic Systems
- Capitalism:
- Principles: profit maximization, presence of competition, private ownership of production, non-government intervention
- Features: labor unions, minimum wage laws, reasonable working hours, regulations to protect workers
- Socialism:
- Principles: inspired by Karl Marx
- Features: property ownership by the state or community, collective ownership of production
This quiz covers the basics of social institutions, including economy, family, church, government, and school, as well as the three sectors of production and the background of the Bretton Woods System.
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