Chapter 9 - International Economics

Question 1

What is IPE? (2)

Answer 1

1) International Political Economy

2) Deals with why countries undertake international trade

Question 2

What is autarky?

Answer 2

The separation of a country from the world economy

Question 3

What is mercantillism?

Answer 3

regulation of econ relations to maximise exports and minimise imports

Question 4

What is Absolute Advantage?

Answer 4

When a country can produce 2 or more goods more efficiently than another country

Question 5

What is Relative Advantage?

Answer 5

When one country has to forego less of another good to produce it than another country

Question 6

Why may countries pursue protectionism? (4)

Answer 6

1) fears of dependency
2) need to maintain industry for extraneous purposes (e.g. military)
3) fear of being unable to develop certain industry
4) internal pressure from groups harmed by trade

Question 7

What are the forms of protectionism? (5)

Answer 7

1) Tariffs
2) Anti-dumping
3) Procurement
4) Import Quotas
5) state interventionism

Question 8

What are 4 types of state interventionism?

Answer 8

1) investment checks (certain companies not allowed to inv est)
2) Regulations (how products were made)
3) Blacklists
4) Reshoring

Question 9

Is protectionism currently an issue? (2)

Answer 9

1) since 2009: tripling in protectionist interventions

2) 55% of trade between G20 affected by protectionism

Question 10

Why would a state fix its XR? (2)

Answer 10

1) fight inflation

2) promote exports

Question 11

Risks of fixing an XR? (3)

Answer 11

1) inflation
2) loss in value of loans
3) potential retaliation

Question 12

What is a MNE? (2)

Answer 12

1) Multinational Enterprise

2) firms with HQ in one country and ongoing business operations in other

Question 13

3 Environmental/workers’ rights issues of MNEs

Answer 13

1) Race to the bottom
2) Regulatory Chill (Pelc)
3) Pollution Havens (Kellenberg)

Question 14

Why are MNEs good for Workers? (4)

Answer 14

1) Race to the top (Mosley)
2) MNE encourage regulation as it protects rights and investments
3) MNEs bring their policies with them
4) MNEs prefer high quality labour to cheap

Question 15

How do MNEs affect HR and democracy? (2)

Answer 15

1) Negative: provide authoritarians with tax revenue used for suppression
2) Positive: promotes econ growth leading to mid-class wanting rights and political voice (Eichenberg)

Question 16

How do MNEs affect international peace? (1)

Answer 16

Countries fearing scaring FDI away so will remain peaceful (Rosecrance)

Question 17

How is IMF voting determined and who has more weight? (2)

Answer 17

1) By contributions

2) US has almost 3 times the voting weight of the second most powerful state (JAP)