5. Global Context Flashcards
(18 cards)
Ways we manage globalization
Trade Agreements
Political and economic unions
World Trade Organization
6 key perspectives of Global complex
Fairness and Development (equal opportunities)
Orientations in Space and Time (The impact of history)
Globalization and Sustainability (How does everything connect)
Scientific and Technical Innovation (Discoveries and technologies)
Identities and Relationships (Interactions in communities)
Personal and Cultural Expression (Expresses unique attributes)
Absolute advantage
The ability to produce the good at a lower cost than it can purchase the good. Uses fewer resources.
Balance of Trade
Difference between the value of a country’s exports and the value of its imports.
Barriers to Trading
Economic Differences (Tariffs, exchange rates, subsidy)
Legal and Political Differences (Laws, embargo (bans), protectionism)
Benefits and cons of free trade
Pros: Fosters geopolitical relationships, promotes innovation, lower prices and costs of goods and bring diversity.
Cons: Cost of cheap goods may be borne by vulnerable populations, fear of privacy, and environmental concerns
Comparative advantage
Advantage in the production of a good if it can produce that good at a lower opportunity cost relative to another country
Country with absolute good should specialize in
The export of products in which it has a relative advantage.
Exporting more is
trade surplus; favorable
Free Trade
Encourages other states to trade by expanding imports instead of restricting (reduces barriers)
Global business
Global commerce and trade
Globalization
Implies more than businesses and assumes deep social and cultural interlinkages among regions of the world.
Importing more is
Trade deficit: unfavorable
Mercantilism
An economic nationalism characterized by state supported monopoly, restraint of imports and encouraging exports. Have idea (more exports, more wealth)
Pros and cons of comparative advantage
Creates more goods available at reasonable prices and more competition/ innovation
Can cause interdependency and less domestic jobs
Pros and Cons of Protectionism
Pros: Gives more domestic jobs, revenues for government and benefits environment
Cons: Higher prices, less output, weakened relationships, less competition.
Protectionism
Government policies that restrict trade to help domestic industries for safety and to improve economic activity within domestic economy
Quota
Fixed amount of product an entity is entitled to receive
