Review Sheet for Global Economics (16/18)

ABOUT THE NOTE CARDS: You are allowed and encouraged to create and use a note card (two sides) to help remember concepts. This must be hand-written and completely original. Photocopies and/or computer printouts will not be allowed. Do this by hand, and do your own work. Failure to follow these rules will result in an immediate, and non-negotiable, failure (ZERO) on this quiz. ALL NOTECARDS WILL BE COLLECTED AND STAPLED TO YOUR QUIZ.
Why do nations trade? o Specialization o Import o Export o Where does the U.S. get raw materials? Figure 16.1 (p. 442) The Basis for trade: o Absolute Advantage explain o Comparative Advantage explain o BE ABLE TO RECOGNIZE EACH ON A GRAPH (P. 444) AND WORK OUT A STORY PROBLEM FOR THE TEST. Barriers to International Trade: o Tariffs: Purpose / function Types: Protective Revenue o Quotas: Real life examples o Other barriers: 1. 2. 3. Protection / Free trade: o Arguments for Protectionism: o GIVE EXAMPLES FOR EACH: Aiding National Defense Promoting infant industries Protecting Domestic Jobs Keeping Money at Home Helping the Balance of payments National Pride o The Free Trade Movement: Smoot-Hawley Tariff Most Favored Nation Clause WTO NAFTA

Obstacles to Development o Population Growth o Natural resources / Geography o Disease / Drugs o Education / technology o External Debt o Corruption Chart on P. 476 o War o Capital Flight o OPEC Cartel o European Coal and Steel Community Reciprocal trade agreements o Most favored nations clause Understand how to read graphs like:

Understand the concept of currency exchange rates. Know current trade information (does the U.S. have trade imbalances with any nations) and how to read it on a chart

What is the dominant economic force in the world? Thomas Malthus o His predictions o Flaws in his predictions Multinational corporations protectionists balance of payments World Trade Organization (WTO) renewable resource subsistence acid rain nonrenewable resources cost-benefit analysis modified free enterprise economy pollution permit outsourcing Free Trade Area of the Americas