Civics Sections 1&2 Chapter 26
Who is associated with communism?
karl marx
What does WTO do?
makes trade rules, helps developing countries, and settles trade disputes
Most countries that have high GDP have what type of economies?
market economies
What type of economy is the U.S.?
mixed economy
What is a positive externality?
money for research
What are the factors of production?
natural resources, capitol, labor, and entrepreneurship
Name three reasons why nations trade?
obtains scarce goods, comparative advantage, and creating jobs
What is communism?
one class all property is held in common and no need for government
What can specialization lead to?
over producing
Why do people oppose NAFTA?
people thought American workers would lose their jobs and the plants would move to Mexico
What is the total GDP divided by the countries population called?
per capita GDP
What is a negative externality?
pollution
What is socialism?
the means of production should be owned and controlled by society, either directly or through the government
What does the WTO oversee?
the trade among nations
What is one way that nations solve the problem of scarcity?
trade
What is positive trade known as?
trade surplus
What are some effects of a trade deficit?
unemployment and lower income
What three decisions does the government make in a common economy?
what to produce how to produce it whose going to produce it
What is an exchange rate?
your nations currency in place of another nations currency
SECTION
2
What three countries are part of NAFTA?
Canada, U.S., and Mexico
What are some factors of production?
Capitol, labor, and natural resources
Why do people support NAFTA?
It will stimulate growth and trade
What does NAFTA stand for?
North American free trade agreement
Name 3 trade agreements?
The European Union, NAFTA, and The WTO
what is negative trade balance?
When the imports exceed the imports
What does WTO stand for?
World trade organization
What is a quota?
a limit on the amount of foreign goods imported
What is free trade?
an agreement between countries to reduce trade barriers
What is the European Union?
an organization of independent European nations
What is a command /controlled economy?
and individual has little influence over how the economy functions
Why is the U.S. a mixed economy?
because individuals are free to make economic decisions but the government regulated some of the trade.
Why do nations trade for goods and services?
because they would not be able to have them or have them as cheaply
What is another name for market economy?
capitalism
The exchange rate is always _____.
changing
What is the main reason countries trade with one another?
comparative advantage
A market economy is _______.
decentralized
What is a market economy?
decisions are made in free markets based on supply and demand
What is a positive balance of trade?
exports exceed the value of imports
In command economies who tells the producers what to do?
government
Who influences externalities?
government
Who owns land and capitol in a common economy?
government
Who regulates competition in a market economy?
government
what 3 things are market economies characterized by?
individual freedom, competition, and less government control
What are the characteristics of a market economy?
individual freedom, competition, dealing with externalities, and higher per capita GDPS
How do you prevent over producing?
sell the extra amount to other countries
What is a goal of putting a tariff on a imported good?
so the price of the imported good is higher
What are the characteristics of a command economy?
socialism, communism, government control, and slow growth
There are two parts to comparative advantage, what are they?
specialization, and Factors of production
Because of comparative advantage nations can ______.
specialize
A tax on imported goods is called?
tariff or custom duty
What are the two most common kinds of barriers to trade?
tariffs and quotas
What is comparative advantage?
the ability of a country to produce a good at a relatively lower cost
What is a balance of trade?
the difference between the value of a nations exports and its imports