chapter 12 questions Flashcards
(23 cards)
How can you, as a high school student, help determine the future of economic globalization?
You can choose to buy goods made in Canada rather than those made in another country.
How is wealth distributed in most South American countries?
The richest 20% of the population owns more than 60% of the wealth. The poorest 20% of the
population owns less than 5% of the wealth.
What countries are associated with MERCOSUR? What is its objective? Give one condition of
becoming a member of MERCOSUR.
MERCOSUR includes Argentina, Brazil, Paraguay and Uruguay. It is also associated with Chile, Bolivia, Colombia, Peru, Ecuador and Venezuela. Its objective is improve its member countries’ economies by opening markets, promoting economic development and conserving the environment.
What countries make up the CAN?
Bolivia, Colombia, Ecuador and Peru.
What are MERCOSUR and CAN planning? What model are they using for their plan?
They want to merge to create a South American free trade area. It will be called Comunidad
Sudamericana de Naciones (CSN – South American Community of Nations). They will be using
the European Union (EU) model for their plan.
Why are South American countries joining trade blocs? Describe an example of a threat to
trading blocs in South America.
They expect this will enable them to increase investment in their economies. There is instability
within the blocs themselves that threatens their plans.
What is the advantage of belonging to a common market? What occurs with countries that are not a part of a common market?
You get free trade of goods and services and the free movement of capital and labour within the
trading bloc.
The EU is not a federation, like the United States. What elements of a federation does it have? What elements of a federation is it working to establish?
flag, anthem, founding date, currency. It is working to establish common foreign and security policies and to address other issues such as citizens’ rights, regional development and environmental protection.
Describe how the European Union is governed.
The European Parliament and Council, elected every five years, pass laws and make policy decisions, while the Council oversees common foreign and security policies and justice strategy.
What is the goal of international trade for developed countries? What is the goal of international trade for developing countries?
Free access for their goods and services. For less developed countries, the goal is to open new markets as well, but for mostly non-manufactured goods like grain and other agricultural food
products.
What has the World Bank achieved, according to the textbook, in the last twenty years?
- The proportion of people living in poverty in less developed countries fell by half form
40% to 21%. - Life expectancy in less developed countries has increased by twenty years.
- The number of children dying before the age of five has been reduced by 50%.
- Adult illiteracy has been reduced to 25%.
What two institutions make up the World Bank and what are their roles?
The International Bank for Reconstruction and Development (IBRD)
International Development Association (IDA).
The IBRD helps low and middle income countries while the IDA focuses on the world’s poorest countries.
Describe two criticisms of the World Bank.
- That it operates on the assumption that the free market can bring prosperity to all nations.
Free market reforms are not always suitable for countries experiencing conflicts. - The Bank is under the political influence of more developed countries like the US. It is
argued that the World Bank could favour increased foreign investment and international
trade which could end up supporting corrupt governments.
What did the World Bank Independent Evaluation Group find about the work the World Bank has done since 1987?
The World Bank’s $38 billion trade program since 1986 has aided market opening but has not been as effective in boosting exports, growth, and poverty reduction.
How does the HIPC Debt Initiative help countries heavily in debt?
HIPCs must agree to a number of reforms to be eligible for debt relief. The reforms include
cutting government spending, selling public assets to the private sector and following the
principles of free market capitalism.
What is the International Monetary Fund working to achieve? Describe three ways it tries to do this.
“Foster global monetary co-operation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty.” It does this by:
1. Surveillance – it assesses each country’s economic situation and discusses it with the
country’s authorities. It publishes its findings twice yearly in World Economic Outlook
and Global Financial Stability Report.
2. Technical assistance and training, free of charge, in areas of banking and financial system
supervision and regulation.
3. Financial assistance to member countries to address debt and reduce poverty.
What do critics of the IMF say about it? How do supporters of it respond to these criticisms?
Supporters argue the US-controlled fund supports capitalist dictatorships, austerity programs, and does not promote democracy, human rights, or labor rights, claiming it has limited power to change.
What was FIRA created to accomplish? Was it successful?
FIRA was established to prevent American control over Canada’s economy through foreign acquisition and business establishment, but its effectiveness was debated, and its end was achieved by the Conservative government in 1985.
How does Canada seek foreign investment today?
It places no restrictions on the repatriation of profit by foreign investors. Profits made in Canada can be taken out of the country by foreign investors.
Why is outsourcing a concern in Canada?
It results in significant job losses in Canada.
List two industries that have been affected by outsourcing.
Communication and high tech fields. Manufacturing jobs such as those in the automotive industry.
Summarize the findings of the 2006 study undertaken by the OECD.
Offshore outsourcing could impact one in five jobs, particularly in IT, accounting, consulting, financial services, and research and development, with automation potentially causing some job losses.
In what field do workers in India have a comparative advantage over North American workers?
In what field do workers in North America have a comparative advantage over Indian workers?
Computer software. Manufacturing.
