Unit 7 Topic 6

Question 1

What are neoliberal policies?

Answer 1

Economic policies that promote free market principles. These policies are defined to increase the role of the private sector in the economy and reduce the role of the government.

Question 2

What are some examples of neoliberal policies?

Answer 2

deregulation, liberalization, privatization, austerity, free trade, monetary policy

Question 3

What is deregulation?

Answer 3

Removing or reducing regulations of business, such as laws and regulations that control prices, protect consumers, or protect the environment.

Question 4

What is liberalization?

Answer 4

Opening up markets to foreign competition by reducing tariffs, quotas, and other trade barriers

Question 5

What is privatization?

Answer 5

Selling state-owned enterprises, such as utilities or transportation companies, to private investors.

Question 6

What is austerity?

Answer 6

Reducing government spending, often in an effort to reduce budget deficits or debt.

Question 7

What is free trade?

Answer 7

Promoting international trade by reducing tariffs, quotas, and other trade barriers.

Question 8

What is monetary policy?

Answer 8

Using tools such as interest rates to control inflation and stimulate economic growth.

Question 9

What are some criticisms of neoliberal policies?

Answer 9

Contribution to income inequality
Contribution to environmental degradation

Question 10

What are some examples of new organizations using neoliberal policies?

Answer 10

EU, WTO, Mercosur, OPEC, etc.

Question 11

What is the EU?

Answer 11

European Union;
-Promotes economic, political, and social integration
-Has its own institutions: the European Parliament and Commission
-Have a common currency
-Very interdependent; countries have to help each other

Question 12

What are the impacts of the EU on member states?

Answer 12

-Economic Integration: All trade and investment are seen in a single, free market
-Political Integration: Cooperation and collaboration among its member states. This helped promote stability and security.
-Consumer Protection: Large range of consumer protection rules and standards. Ensured high-quality and safe products.
-Environmental Protection: Protection rules and standards applied to all member states. Helped protect air, water, waste, and climate quality. Promoted sustainable development.

Question 13

What is the WTO?

Answer 13

World Trade Organizationan:
An international organization that promotes free trade
Promotes the liberalization of international trade
Sets rules and standards for all member states

Question 14

What is Mercosur

Answer 14

-Located in South America
-Promotes economic integration within member states
-Aims to create a common market
-Aims to encourage trade with other countries

Question 15

What is OPEC?

Answer 15

The Organization of the Petroleum Exporting Countries:
-Consists of 13 oil-producing countries
-Aims to coordinate and unify the -petroleum policies of member states
Influences global oil prices

Question 16

What are supranational organizations?

Answer 16

An international organization that operates above the level of individual nation-states.

Question 17

What are some characteristics of supranational organizations?

Answer 17

Member states are willing to cede some of their sovereignty to the organization
Powers and functions beyond a traditional international organization

Question 18

What are some examples of supranational organizations?

Answer 18

European Union (EU), African Union (AU), World Trade Organization (WTO), International Monetary Fund (IMF)

Question 19

What is comparative advantage?

Answer 19

The ability of a country, firm, or individual to produce a good or service at a lower opportunity cost than other producers.
-Explains why countries specialize in specific goods and services
-A very important concept in international trade

Question 20

What is complementary advantage?

Answer 20

The ability of two countries to complement each other’s production through trade.
-Both countries benefit from trading with each other

Question 21

What is NAFTA (now USMCA)?

Answer 21

North America Free Trade Agreement
-Removed all tariffs between America, Canada, and Mexico
-Allowed for maquiladoras to be built

Question 22

What is the impact of NAFTA on its member states?

Answer 22

-Agricultural Products: Easier for farmers to sell their products to each other
-Automobiles: Automobile manufacturers found it easier to source parts and materials from each other
-Services: Service providers find it easier to work in each other’s markets
-Investments: Allows people to invest and provide investor protections

Question 23

What are maquiladoras?

Answer 23

Factories in Mexico run by foreign companies that export their products back to the home countries.
-Allowed for cheaper and quicker manufacturing of products