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Principles Of Macroeconomics > Test 1 > Flashcards

Test 1 Flashcards

1
Q

1.

A

Global Market Place

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2
Q

2.

A

Global Market

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3
Q

3.

A

Global Institutions

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4
Q

4.

A

Global Institutions (Not IMF)

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5
Q

5.

A

Global Institutions

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6
Q

6.

A

Criticization of a Global Institution

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7
Q

7.

A

The Investment of Resources

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8
Q

8.

A

High Tarrifs

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9
Q

9.

A

Integration of the word “economy”

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10
Q

10.

A

FDI Foreign Direct Investment

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11
Q

11.

A

A type of society: Individualism vs. Collectivism

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12
Q

12.

A

Political Philosophy

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13
Q

13.

A

State owned enterprises

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14
Q

14.

A

Form of Government

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15
Q

15.

A

Economic System

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16
Q

16.

A

A type of economy: Free-market, socialist, and command

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17
Q

17.

A

Resolve conflict between countries

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18
Q

18.

A

Intellectual property rights in business

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19
Q

19.

A

Economic Freedom

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20
Q

20.

A

Annual income of people

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21
Q

21.

A

Quality of life

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22
Q

22.

A

Development of new product

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23
Q

23.

A

Being partly free

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24
Q

24.

A

State owns key industries

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25
Q

25.

A

Country selling key industries (communications/ airlines)

26
Q

26

A

Unfavorable environment for innovation

27
Q

27.

A

Are people in U.S free? Democracy, yes

28
Q

28.

A

Which political system prevents property rights? Totalitarianism

29
Q

29.

A

You will likely to do more trade if you live in . . . Coastal area

30
Q

30.

A

In the last 30 years, the world has been a little…more democratic.

31
Q

Define Globalization

A

Refers to the shift toward a more integrated and interdependent world economy. Globalization has several facets, including the globalization of markets and the globalization of production.

Question 1

32
Q

What product are global markets typically for, not for and why?

A

They are typically for industrial products that serve usual needs, not for consumer products because national differences and can still act as a brake for globalization.
Question 2

33
Q

Why are international treaties and global institutions made?
List global institutions

A

Since business transcends outside national borders, institutions are needed to help manage, regulate, and police the global marketplace and to promote multinational treaties to govern.
General Agreement on Tariffs and Trade (GATT) -> Wold Trade Organization (WTO)
International Money Fund (IMF) & World Bank
United Nations (UN)
Group of Twenty (G20)
Question 3.

34
Q

Name and define institutions (Non IMF)

A

General Agreement on Tariffs and Trade (GATT) = committed signatories to lower barriers -> Wold Trade Organization (WTO) = adhere to the rules
World Bank = 1944, 44 Nations, Brenton Woods, New Hampshire; Promote low interest loans for countries
United Nations(UN) = 1945, New York City, OG 53 -> 193 countries, promotes peace and basic human rights
Group of Twenty (G20) = 1999, EU and 19 largest economy, 90 % GDP, 80% International Trade, Control Global Market
Question 4

35
Q

Name and define global institutions (IMF)

A

General Agreement on Tariffs and Trade (GATT) = committed signatories to lower barriers -> Wold Trade Organization (WTO) = adhere to the rules
1944, 44 Nations, Brenton Woods, New Hampshire:
World Bank = Promote low interest loans for countries; International Money Fund (IMF) = Maintain order in international monetary system, strings-attached loans that forces narrowing countries to adopt certain economic policies
United Nations(UN) = 1945, New York City, OG 53 -> 193 countries, promotes peace and basic human rights
Group of Twenty (G20) = 1999, EU and 19 largest economy, 90 % GDP, 80% International Trade, Control Global Market
Question 5.

36
Q

Why is the IMF criticized?

A

Critics argue that the policies that the IMF forces on borrowing countries are inappropriate and usurps the sovereignty of nation-states.
Question 6

37
Q

What is the difference between international trade and foreign direct investment (FDI)?

A

International trade occurs when a firm exports goods or services to another country where as FDI occurs when a form invests resources in business activity outside its home country.
Question 37

38
Q

What is the goal of tariffs and what is it’s problem?

A

Tariffs are barriers (taxes) aimed to protect domestic industries from foreign competition however the retaliatory trade policies (countries raising trade barriers), “beggar the neighbor,” arose.
Question 8

39
Q

What has been the consequence of the growing integration of the world economy into a single marketplace?

A

There has been an increase in the intensity of competition in the manufacturing and service industries.
Question 9

40
Q

Why has the value of foreign direct investment increased?

A

Due to the reduction in barriers limiting FDI between countries such as the changing national laws of the UN
Question 10

41
Q

What is collectivism?

A

Refers to a political system that stresses the primacy of collective goals over individual. Society put before the self. Originated by Plato
Question 11

42
Q

Who are socialists and who was their root?

A

They believe in public ownership of the means of production for the common good of society. Roots can trace back to Karl Marx who argued that few benefited from capitalism, workers are exploited.
Question 12

43
Q

What is the problem with state-ownership?

A

Because of their monopoly, guarantee of financial support, and the extremely high taxes, they become very inefficient. As result government switch to privatization.
Question 13

44
Q

In an ideal representative democracy, what are the safeguards written as constitutional law to hold elected representatives accountable?

A
  1. Individual’s right to freedom of expression, opinion, and organization
  2. Free media
  3. Regular elections in which all a eligible citizens are allowed to vote
  4. Universal adult suffrage
  5. Limited terms for elected representatives
  6. A fair court system that is independent from the political system
  7. Nonpolitical state bureaucracy
  8. A nonpolitical police force and armed service
  9. Relatively free access to state information

Question 14

45
Q

What is a market economy?

A

Privately owned where price is determined by supply and demand.
Supply > Demand = - prices
Supply < Demand = + prices

Question 15

46
Q

What is a command economy?

A

The government decided not only how goods and services are produced but also who receives them and how much.

Question 46

47
Q

What is CISG and what does it do?

A

The United Nations Convention on Contracts for the International Sale of Goods
Establishes a uniform set of rules to govern during disputes of contracts between sellers and buyers of different nations, ignoring their own country’s laws.
Question 17

48
Q

What are intellectual property, patent, copyrights, and trade marks?

A

Intellectual property are products of the mind which can be protected by the fallowing:
-Patent = grants the inventor of a new product or process exclusive right to the manufacture, use, or sale of that invention.
-Copyrights = the exclusive legal rights of authors, composers, playwrights, artists, and publishers to publish and disperse their work as they see fit.
-Trademarks = the designs and names, often officially registered, by which merchants or manufacturers designated and differentiate their products
Question 18

49
Q

What does government do to prevent monopolies?

A

-Ban restrict business practices designe to monopolize
-Private ownership to give entrepreneurs incentives

Question 19

50
Q

What is GNI?

A

Gross national income = measures the total annual income received by resident of a nation

Question 20

51
Q

What is HDI and who argued for it?

A

Human Development Index = to assess how life expectancy at birth, educational attainment, and whether average incomes are sufficient to meet the basic needs of life in a country; brought in by the UN

Amartya Sen, Nobel Prize-winning economist

Question 21

52
Q

What is innovation?

A

The development of new products, processes, organizations, management practices, and strategies.
Question 22

53
Q

What are “partly free” countries?

A

Characterized by some restrictions on political rights and civil liberties, often in the context of corruption, wears rule of law, ethnic strife, or civil war.

Question 23

54
Q

What happens in a mixed economies?

A

The role of state is limited but does control certain sectors.
Question 24

55
Q

Why does the state privatize?

A

Privatization gives businesses the incentive by the reward of greater profits which results in better productivity and service.
Question 25

56
Q

Why does state allow business to compete with the assets they sell during privatization?

A

To prevent state-owned monopolies from being replaced with a private monopoly.
Question 26

57
Q

What political system allows the U.S. people to be free?

A

Democracy
Question 27

58
Q

Which political system presents property rights?

A

Totalitarianism
Question 28

59
Q

In which country are you more likely trade, landlocked or coastal?

A

Coastal
Question 29

60
Q

In the last 30 years has the world become more or less democratic?

A

More democratic
Question 30

Principles Of Macroeconomics (4 decks)

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