Unit 7: Globalization: The Good, the Bad, and the Ugly
a system under which the values of currencies are fixed in relation to one another
fixed exchange rates
COMESA is a _____.
19-country common market for eastern and southern Africa.
When did the dollar start to "float"?
1971
What conclusion can be drawn about capitalism from South Korea's economic growth in the late 20th century?
Capitalism can restore a damaged economy.
gross domestic product on a per person basis
GDP per capita
What is the main difference between Japanese capitalism and capitalism in the United States?
Japan's government is highly involved in day-to-day business management.
What is the world's largest free trade area?
NAFTA
What would a free-trader most likely support?
NAFTA
Which statement describes why the people in a nation with a command economy might resist a shift to a free market economy?
People who hold political power are threatened by fundamental changes.
Which country is an example of a capitalist country?
Singapore
The last stage of economic growth is _____.
The High Development Stage
High oil prices in the United States resulted in which of the following consequences?
The search for alternative energy sources intensified.
Who is most likely to place an embargo?
a national government
one country's ability to produce more of a given product than another country
absolute advantage
pollution in the form of rainwater mixed with sulfur dioxide to form a mild form of sulfuric acid
acid rain
Country A can produce more coal than Country B. An economist would say that Country A has _____ over country B.
an absolute advantage
the difference between money paid to and money received from other nations when engaged in trade
balance of payments
a group of sellers or producers acting together to raise prices by restricting availability of a product
cartel
one country's ability to produce a given product relatively more efficiently than another country
comparative advantage
The number of live births per 1,000 people in a country is called _____.
crude birthrate
act of not repaying borrowed money
default
splitting work into a number of separate tasks to be performed by different workers
division of labor
The opposite of the Malthus theory of the economic future of the world is _____.
economic growth as people develop new production methods and limit population growth.
In international trade, comparative advantage is measured in _____.
efficiency
government confiscation of private- or foreign-owned goods without compensation
expropriation
In the context of foreign exchange, which two words are synonyms?
flexible and floating
a system that relies on supply and demand to determine the value of one currency in terms of another
floating exchange rates
Trade deficits tend to correct themselves automatically due to _____.
floating exchange rates
foreign currencies used by countries to conduct international trade
foreign exchange
mixture of 90 percent unleaded gasoline and 10 percent grain alcohol
gasohol
substantial oversupply of a product
glut
central planning authority in the former Soviet Union Answer 3
gosplan
independently owned group of Japanese business firms united to regulate competition
keiretsu
the next best alternative use of money, time, or resources when one choice is made rather than another
opportunity cost
hiring outside firms to perform non-core operations to lower operating costs
outsourcing
fundamental restructuring of the Soviet economy, introduced by President Mikhail Gorbachev
perestroika
diagram representing maximum combinations of goods and/or services an economy can produce when all productive resources are fully employed
production possibilities curve
a tax on an imported product designed to protect less efficient domestic producers
protective tarrif
a tax placed on imported goods to raise revenue
revenue tariff
loans that may never be paid back; usually involves loans to developing countries
soft loans
independent Polish labor union founded in 1980 by Lech Walesa
solidarity
Globalization means having _____.
standardized production of products that are sold throughout the world.
_____ are taxes on _____.
tariffs on imports
A major step for the European Union was the introduction of _____.
the euro
condition in which the average number of births and deaths balance so that population size is unchanged
zero population growth
Which of these statements apply to present-day Sweden?
Its unemployment rate and GDP per capita are relatively high.
According to economists, international trade among countries _____.
decreases the chance of conflict because of economic advantages
To control pollution, the U.S. Congress has established that all cars sold in the United States cannot _____.
exceed certain maximum emission standards.
Two reasonable ways in which countries can fund economic development are _____. (Choose only one answer.)
microfinance and IMF financial aid.
A growing trend of globalization is _____.
specialization and division of labor in production.
