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Economics

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Karina Ernser

Lvl 10
โˆ™ 2021-10-24 18:33:56
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Cards in this guide (25)
Why hasn't globalization benefited the majority of the world's underdeveloped countries

Underdeveloped countries don't have the productive capacities necessary to take advantage of increasing international trade.

Environmental-protection laws can be bad for the economy because they may do what

Environmental-protection laws can be bad for the economy because they may increase unemployment.

How can a country respond to a trade embargo

By seeking other trading partners

it could pursue a policy of national self-sufficiency

What gives a country a comparative advantage

When it gives up less than others to engage in a particular type of production

Why does the IMF impose conditionality on countries that accept its loans

The IMF wants to help fix the economies of countries that need its help. <apex>

Why do central banks play an important role in the global economy

Central banks control the foreign currency reserves that are used for international trade.
They also set each country's monetary policies.

The existence of an international division of labor among countries enables those countries to have what

Specialized production

Why does the growth of international trade lead to a rising global standard of living

International trade enables specialization, which brings increased efficiency and greater competition.

What does the World Bank hope will result from the loans it makes to developing countries

An improved climate for foreign investment

Why is foreign aid given

Foreign aid is initially provided for short term aid in emergencies. The goal of foreign aid is to help make people self-sufficient and able to take care of themselves.

What is the main goal of the WTO

To assure that international trade flows smoothly and freely

How does the WTO help stabilize the global economy

By assuring that producers will have open access to necessary resources

Which of these is a gift of money from one government to another

Foreign aid

Why does the World Bank charge little or no interest on the loans it makes

Its main purpose is to promote development, not make profits.

Why does globalization give countries an incentive to reduce wages for their workers

Lower production costs help lure foreign investment.

Why don't companies doing business in countries with repressive governments object to the human rights abuses

Companies taking advantage of low labor costs don't make trouble for repressive governments.

Why does the IMF impose conditions on its loans

To help manage the economies of struggling countries

Because most developing countries have weak domestic industries they do not benefit from what

Free-trade policies

When does country X have a comparative advantage in the production of coffee

When they can produce it at a lower opportunity cost than other countries.

Why do many people object to globalization

They feel that globalization mainly serves the interests of the United States at the expense of poor countries.

If developing countries have weak domestic industries they do not benefit from what

Free-trade policies

What has been the main drawback of globalization for the United states

Competition with lower wages and jobs leaving the country are some of the major drawbacks of globalization.

Why do lower labor costs in other countries lead to job loss in the United States

Lower labor costs in other countries lead to job less in the United States because it enables producers to undersell domestic producers.

What does absolute advantage have to do with making economic choices

Think that you're country A, wanting to buy pen and paper.

Country B produces 1 million pen and 1 BILLION paper

Country C produces 1 BILLION pen and 1 million paper

Or, country B has the absolute advantage over production of paper while

country C has the absolute advantage over production of pen.

Coming back our theory of economy of scale, we know that to a certain point, increased production would lead to lower average cost and thus, lower price.

This would mean that paper from country B is cheaper than country C whereas pen from country C is cheaper than country B.

Therefore, you would choose to trade paper with country B while trading pen with country C.

And this is why it is important to making economic choices.

What would cause job loss in the united states

people playing call of duty

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