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GEOG 216 > 1st Midterm > Flashcards

1st Midterm Flashcards

(95 cards)

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1
Q

Who lead the 19th century trade boom?

A

the United Kingdom

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2
Q

What drove the 19th century trade boom?

A

free trade, the industrial revolution (it was too expensive to feed the workers), new techonological innovations, transportation and communication innovations, the gold standard, international migration, peace

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3
Q

Why did technological innovations lead to the 19th century trade boom?

A

endogenous growth - innovation leads to trade -> leads to surplus -> leads back to innovation (and provides incentives for trade)

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4
Q

How did transportation and communication innovation help the 19th century trade boom?

A

goods that weren’t worth trading became worth it; in mercantilism, they only traded high value low bulk luxury goods

it made the world more interconnected

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5
Q

How did the gold standard drive the 19th century trade boom?

A

Because it essentially created a global currency.

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6
Q

How did world peace drive the 19th century trade boom?

A

Trade is viewed as a win/win, so there was less conflict. Armies from the mercantile era now enforced a hegemony over the world.

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7
Q

How did import substitution from the mercantile era aid the company when free trade happened?

A

They became very efficient at producing for the domestic market, which when free trade opened up, they were able to export worldwide, which expanded their possible market.

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8
Q

What is the order of colonialism?

A

Discovery -> Conquest -> Colonization

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9
Q

What were the two major waves of colonization and what happened in them?

A

16-19th century: companies could run colonies

19-early 20th century: more players because of free trade, scramble for africa.

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10
Q

What were the economic roles of colonies?

A

source of resource and revenue (primary products, labour, taxation)

new market for industrial goods

new investment oppotunities

‘safety value’ for excess population (citizens could move there for opportunities, you could climb to a higher social rank there, refuge like in the Irish potato famine)

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11
Q

What are the outcomes of colonialism on the colonized nations?

A

impact on indigenous people (abuse of them, genocide, diseases)

economic centering on primary products for exports

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12
Q

What are the global outcomes of the trade boom?

A

economic growth due to free trade

market integration

income divergence (within and between countries, gdp used to be population driven but became productivity driven)

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13
Q

What was the objective of mercantilism?

A

to amass as much silver and gold as possible (through extraction, trade, conquering, or piracy)

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14
Q

What mercantilist policies were put in place?

A

trade monopolies were established

import tariffs - to prevent people in the country from buying stuff from others

substitution of manufactures - people will have domestic alternatives (to reduce imports)

strong navy and military

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15
Q

What was trade like in the Roman Empire?

A

trade was extensive (both land and sea)

built instrumental roads

different materials from all over, all converge on Rome

highly integrated through trade

trade fed the expansion of imperial Rome

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16
Q

By what routes were goods traded by in Medieval Europe?

A

trade is primarly over land then - since the southern mediterranean and sahara trade routes were cut off

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17
Q

How did trade evolve in the Middle Ages

A

TL;DR: fragmented -> self-sufficient manors -> market towns

started fragmented

manors and serfs came about with self-sufficient estates

started markets, towns were where you went to to escape (for any reason) or had a trade, market exchange economy

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18
Q

What was the Treaty of Tordesillas?

A

It was the line the Pope drew on the map to divide the world between Spain and Portugal.

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19
Q

What innovations came about during the age of exploration to enable trade?

A

finance and banking centres develop - bonds, double book accounting

ship building and navigation

printing press

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20
Q

What was traded during the age of exploration?

A

luxury goods - high value and low bulk

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21
Q

What were the first multi-national corporations and when did the come about?

A

the East India Companies (Dutch, English, French) during the age of exploration

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22
Q

Who challenged mercantilism?

A

John Locke, Adam Smith, and David Hume

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23
Q

What thoughts challenged mercantilism?

A

the wealth of a nation is not in gold and silver - wealth is created by human labour

trade is not a 0-sum game - gains from trade can be mutually satisfying

more gold and silver you had = more inflation

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24
Q

What is absolute advantage?

A

the ability of an individual or group to carry out a particular economic activity more efficiently than another individual or group

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25
What is comparative advantage?
It is where margin of superiority is greater, or margin of inferiority is slimmer in producing a service or product compared to another company.
26
What are some differences in factor endowments?
Natural resources/raw materials Climate and terrain (includes stuff like landlocked) Labour force (quantity and skills) Capital and/or technology
27
What is time-space compression?
processes that revolutionize the qualities of space and time such that the ways which we represent the world are altered
28
What, other than circulation techonologies grow global interconnectedness?
national policies
29
What are circulation technologies?
transportation and communication technologies
30
Is time-space compression even, why or why not?
No, investment in transportation and communication infrastructures happen where demand and financial returns are greatest.
31
What was Canada's link to the world economy pre-1800s?
part of the periphery exported stapes to Europe
32
What are staples?
raw materials that are extracted and shipped without any transformation
33
How did Canada's link to the world economy change in the mid-1800s?
exports of resources began flowing to the US, as the US NE industrialized
34
How did Canada's economy change in 1867?
All due to Canada becoming independent: Transcanada railroad Tariff protection Industrial cores emerge Encouraged east-west trade flows
35
When did Ontario and Quebec become key manufacturing districts?
World War II
36
When was the Canada-US Auto Pact?
1965
37
What did the Canada-US Auto Pact do?
eliminated trade tariffs on cars, trucks, and automotive parts
38
Was the Canada-US Auto Pact free trade or managed trade?
managed trade because it is reserved for one industry/sector
39
When was the Canada-US Free Trade Agreement?
1988
40
When was NAFTA?
1994
41
What is the equation for GDP?
Consumption + Industry + Government expenses + (eXports - iMports) capitals are their variable letter
42
What is the equation for trade?
eXports + iMports capitals are their variable letter
43
What is the equation for the trade to GDP ratio?
(X + M)/GDP
44
What industries does Canada have a trade surplus in today?
Many Staples: fish and agriculture, energy and oil, forestry, minerals
45
What industries does Canada have a trade deficit in today?
Many Manufactured Industries: chemical and rubber products, machinery and equipment, electronics, motor vehicles and parts, consumer goods
46
What is the Global Triad and what does it mean?
North America Europe East and South East Asia They are the three regions of the world that the world economy is centered around.
47
What percent of trade flows are goods?
75%
48
What percent of the world's GDP does the global triad account for?
85%
49
What percent of the world's trade does the global triad account for?
85%
50
What are the four largest manufacturing countries?
China followed by US, Germany, Japan, which swap around by year
51
What is manufacturing value added?
the total estimate of output of all manufacturing; obtained by adding up outputs and subtracting intermediate consumption
52
What is a trade deficit?
value of imports > value of exports
53
What is a trade surplus?
value of exports > value of imports
54
By how many times has trade increased since 1980 and GDP?
GDP x3 Trade x30
55
What are the four industry sectors and what do they do?
Primary Sector: production and retrieval of raw materials, includes subsistence and commercial agriculture Secondary Sector: transformation of raw materials into finished or manufactured goods Tertiary Sector: sale and exchange of goods and services Quaternary Sector: handling and processing of knowledge and information
56
How is the division of labour worldwide divided?
Core and the Periphery and Semi-Periphery
57
What are the factors in industrial locations?
access to input (raw materials, energy) availability of labour (skills, qualifications) processing costs (land, labour, capital) 'pull' of the market transfer costs of alternative locations (getting goods to production site and to consumers) institutional and cultural factors (e.g. subsidies, language, environmental regulations) behavioural considerations (e.g. agglomeration)
58
What is the difference between light and heavy manufacturing?
Light: manufacturing to consumers to be sold on the market Heavy: manufacturing products to be used to create other products (?), usually very capital intensive
59
How do economies change over time, when it comes to industry sectors?
primary -> secondary -> tertiatry and quaternary
60
What is GDP?
the market value of all goods and services produced within a country’s border in a year
61
What is GDP PPP?
GDP but adjusted to be as if it was all sold in the US
62
What is GNP?
market value of all goods and services produced by a country’s nationals in a year
63
What are two ways to assess income inequality?
income shares Lorenz curve and GINI coefficient
64
What is the true source of sustainable growth of wealth in a nation?
productive investment
65
Is domestic investment is superior, inferior, or neither to foreign investment?
Neither, there is no superior form of investment.
66
When was the Treaty of Tordesillas signed?
1494
67
Where was the line drawn in the Treaty of Tordesillas?
Used to be 555km west of Cape Verde, but later became 1500km west.
68
Why did the East Asian countries develop so well?
commitment to education and a docile, well-trained workforce high level of national savings due to governmental policies supported industries targeted for growth (subsidies, low taxes, training grants) egalitarian ownership of arable land (reduced poor farmers flocking to the cities) committed to exports (did not resort to import substitution to protect their economy)
69
What are three ways to develop less developed countries?
expand trade with less developed countries invest private capital in less developed countries provide foreign aid to less developed countries
70
What characteristics are common in countries in the economic core?
research and development activities are concentraded there manufacturing jobs are highly mechanized, have a high cost of transportation for finished products, and/or rely on regional consumption high levels of education and access to technology are the norm large labor forces employed in the tertiary sector
71
What characteristics are common in countries in the economic periphery and semi-periphery?
labor-intensive manufacturing: labor is cheap regulations are few tax rates are low
72
What are some economic factors that increase with GDP? change card
exports and imports accumulation of capital (both financial and human capital)
73
What is Engel's Law?
as people’s incomes rise, the share that goes to food decreases
74
What are some ways economies and societies change as they develop?
economic structural changes (trade, saving) urbanization inequality
75
What is Kuznet's Curve? And what can be seen in it?
graphed Log of GDP per capita on x, and Gini coefficient on y found that as GDPs per capita increase, inequality first increases then falls (as they industrialize, some industrialize while others don’t; differences get muted as more people adopt industrialization)
76
What are some theories of economic development?
stages of growth two-sector model dependency theory endogenous growth theory
77
What is the stages of growth development theory?
Countries need to save enough money to be able to invest in growth (schools infrastructure). Countries are like an airplane, they need to hit a certain speed/savings to take off. Walt Rostow (also had the idea of foreign aid)
78
What is the two-sector model theory?
People in agriculture and not in industry (the two sectors) are excess labour. Rural people move to the city and make little, but still more than in agriculture; urbanization. The drawing of excess labour from the countryside to the cities causes growth. Arthur Lewis
79
What is the dependency theory?
The development of western europe and NA left the rest of the world poor. Development and underdevelopment are two faces of the same coin. The world is divided into the core and periphery, and countries are trapped in a state of underdevelopment. They are stuck exporting raw materials that are turned into finished goods and sold back to them.
80
What is the endogenous growth theory?
Economic growth comes from land, labour, capital, and technological change and how they interact (endogenous growth), particularly between human and physical capital. Most recent and prevailing theory.
81
What are some paths to economic growth?
primary products exports inward-looking industrialization export-oriented industrialization
82
What is the primary products exports path to economic growth?
To develop, countries should export primary products that they have a comparative or absolute advantage in. These funds then get invested back into the economy.
83
What is the inward-looking industrialization path to economic growth?
Manufacture products you haver a comparitive advantage in. Substitute what you're importing with domestic products. Move from resource to labour to capital to knowledge intensive production.
84
What is the export-oriented industrialization path to economic growth?
The government identifies sectors they want to promote in manufactuing and export. Give them subsidies and preferential treatment (set targets and provide rewards, invest in ports and special economic areas). Manage exchange rates to make exports cheaper. Provide credit to firms at subsidized rates. Shift comparative advantade from labour to capital intensive industries. Cut the losers.
85
What is economic internationalization?
extent to which national economies interact with one another through the exchange of goods and services
86
What is economic globalization?
set of processes which economic activities are increasingly connected
87
What do skeptics believe about globalization?
Globalization is not new and is just a mislabeling of econmic nationalization. The nation state is still the main actor.
88
What do transformationalists believe about globalization?
Globalization is ongoing and transformative. National economic space no longer corresponds to national territorial borders.
89
What do hyperglobalizers believe about globalization?
The world is completely different, integration-wise, from 100 years ago. Nation states are less important due to MNCs, and the world is borderless.
90
By what percent did trade increase per year between 1800 and World War I, how does it compare to the previous period?
4%, compared to 1% in 1500-1800
91
What are some modern drivers of globalization?
trade liberalization international governence trade greater connectedness
92
What are some consequences of a more global economy?
loss of domestic control of a nation over its economy increased intra-firm trade job opportunities and job losses
93
What is an opportunity cost?
the amount of resources one must lose in the production of a different product
94
What is the definition of economic institutions?
a set of norms and rules that govern commerce, trade, production and consumption
95
What are privater and public goods?
private goods are excludable and rivalrous public goods are neither excludable nor rivalrous

GEOG 216 (2 decks)

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