Econ 340 Final Exam

Front 1

what is international economics

Back 1

not about countries, but about the interactions between countries

Front 2

how much land does the world economy exist of

Back 2

about 15 times the US

Front 3

why is US unusual- richness

Back 3

we have 5% of the population, but more than 20% of the world income

Front 4

what is world GDP and per capita

Back 4

GDP= 40 trillion
per capita= 9 thousand

Front 5

what is US GDP and per capita

Back 5

GDP= 12 trillion
per capita= 40 thousand

Front 6

GDP

Back 6

gross domestic product

Front 7

is US free? give 2 reasons why or why not.

Back 7

we dropped to #10 on the scale for economic freedom. this is due to increased govt spending and increased barriers to trade and investment

Front 8

Eiras reading regarding freeness... "No Longer a Champion of Economic Freedom"- why is US falling behind

Back 8

1)expansion of expensive entitlement programs
2)not freeing markets fast enough/ economic openess not keeping up
3)increased govt spending

Front 9

Eiras (Loss of Economic Freedom) regarding net flow of FDI

Back 9

FDI has decreased sharply; this can cause price to fall, less opportunities, less foreigners to invest, our leadership and power to decline

Front 10

Eiras(Loss of economic freedom) on govt spending

Back 10

includes unemployment compensation, education spending, health programs, agricult subsidies

Front 11

Eiras on how to fix lower economic freedom (5)

Back 11

1)better trade policy- duty free, no non-tariff barriers
2)help fiscal burden- better tax regimes
3)fewer restrictions for FDI and capital flows
4)less regulations in labor laws, environmental/zoning
5) make informal market (black market) smaller

Front 12

Eiras on how Bush can help increase economic freedom

Back 12

cut expenditures, balance federal budget, eliminate barriers, support free trade

Front 13

Eiras: How is "economic freedom" defined? How does the Heritage Foundation measure it?

Back 13

EF: foundation for US strength. Measured by Index of Economic Freedom. There are 10 sectors ranked 1-5.

Front 14

Eiras:Is it inward FDI or outward FDI that the author regards a desirable effect of economic freedom, and why?

Back 14

inward FDI

Front 15

Eiras: What reasons are given for the fall of the US in the economic freedom rankings?

Back 15

expenditure spending, barriers, expansive entitlement programs are given more priority

Front 16

How do countries interact economically?

Back 16

through trade,

migration (temp and perm workers),

direct & indirect policies that affect other countries

capital flows- includes financial (holdings of assets abroad) and Real (international ownership)

Front 17

who trades the most?

Back 17

EU-15, US, China, Japan, Canada (decreasing order). Developed countries are biggest traders. China is catching up though in trade volume

Front 18

who trades with whom?

Back 18

rich countries tend to trade more. N.A., Europe, Asia tend to trade with each other. Latin Am and AFrica (poor) trade mostly with rich

rich AND poor trade mostly with RICH

Front 19

What is the biggest traded category of world trade

Back 19

manufactures

Front 20

what is the fastest growing category of world trade

Back 20

mining-- of oil and such

Front 21

What does US export/import?

Back 21

exports agri, imports oil

Front 22

what was the fastest growing category of world trade from 00-04?

Back 22

minerals and ores

Front 23

whats the fastest growing category of trade today??

Back 23

prob fuels, because this is the VALUE of trade and oil prices have been rising drastically

Front 24

What percent of all trade is automotive?

Back 24

10%

Front 25

fastest growing lately of merchandise exports

Back 25

iron and steel and chemicals

Front 26

does US import or export more

Back 26

import more

Front 27

what is the US a big importer or exporter of

Back 27

export agricult, import oil, export AND import capital goods (machines for making things)

Front 28

US's trade and GDP

What is the exception to this

Back 28

US exports a lot, but it is a smaller part of GDP than other countries

exception: Singapore and Nepal

Front 29

Whats significant about Singapore's GDP and trading

Back 29

Singapore's exports can be more than GDP. This is because their exports are made with imports.

Front 30

How do countries interact economically?

Back 30

through capital flows- includes financial (holdings of assets abroad) and Real (international ownership)

Front 31

What is included in Financial capital flows

Back 31

currency, bank deposits, bonds, stocks, bank loans

Front 32

What is included in Real capital flows

Back 32

real estate, capital assets (plants and equip), sotcks if ownership is large

Front 33

In terms of capital flows, how is the US

Back 33

we owe more than we own of assets! we are a large net debtor (we spend more than we earn). some of this is govt but a lot if private

Front 34

How do countries interact economically

Back 34

migration (temp and perm workers), direct and indirect policies

Front 35

what are direct policies? (5)

Back 35

trade policies, foreign aid, capital controls, exchange rate management, immigration restrictions

Front 36

Hufbaurer and Grieco- Payoff from globalization

what are the efects of globalization?

Back 36

increased US income and better economic growth

Front 37

Hufbaurer and Grieco- Payoff from globalization

how to globalize (4)

Back 37

expansion of intl trade (inc GDP),
lower tariffs (stimulates productivity, inc product choices),
general equilibrium (inc GDP),
productivity benefits

Front 38

Hufbaurer and Grieco- Payoff from globalization

By how much have US tariffs fallen over 60 years? By how much have incomes risen due to reduced costs of trade?

Back 38

40%, incomes risen by 1 trillion, 10000 a household

Front 39

Hufbaurer and Grieco- Payoff from globalization

With tariffs now low, is their scope for any further liberalization? Why?

Back 39

yes, other sectors that havent been affected will be affected (agricul, developin countries, services, transport)

Front 40

Hufbaurer and Grieco- Payoff from globalization

Who loses from liberalization, how, and how much?

Back 40

personal losses are encountered. people who lose jobs... but this is only a small cost compared to benefits of increased income. those who compete with imports will have serious losses

Front 41

Center for Global Development

what percent of exports go to developing countries, and how high are tariffs

Back 41

45%, tariffs are higher for developing than developed esp. agri, textiles, footwear. we also tariff processed goods, this decreases profit on manufactured (higher value) goods

Front 42

Center for Global Development

How important is trade for the United States, and especially its trade with developing countries?

Back 42

1/3 exports go there, 1/3 imports come from them

Front 43

Center for Global Development

Did NAFTA help the people in Mexico?

Back 43

yes, increased exports and FDI. Created jobs and inc personal income

Front 44

Center for Global Development

Do US tariffs cause greater harm in other rich countries or in poor ones?

Back 44

poor countries. they are higher in poor. impose taxes on processed goods and we also subsidize things

Front 45

Center for Global Development

Who gets more from rich country governments: rich country farmers or poor countries?

Back 45

rich country farmers. 80% of help goes to top 10%. Majority go to agribusinesses, despite 90% are small farmers

Front 46

Examples of indirect policies

Back 46

subsidies of agri, macro policies (monetary, fiscal), environmental policies, standards

Front 47

IMF

Back 47

International Monetary Fund

Front 48

WTO

Back 48

World Trade Organization

Front 49

OECD

Back 49

Organization for Economic Cooperation and Development

Front 50

What does IMF do?

Back 50

give financial assistance, lends money to countries

Front 51

What does World Bank do?

Back 51

gives development assistance, helps poor countries be less poor; economically not financially

Front 52

When was WTO established?

Back 52

1995

Front 53

What does WTO do?

Back 53

trade policy regulation and negotiation of int'l trade policies/tariffs

Front 54

What are "Beggar Thy Neighbor Policies"? and name 2

Back 54

hleping yourself at the expense of others-- high tariffs and competitive devaluations

Front 55

what are high tariffs?

Back 55

tax on imports

Front 56

what are compeitive devaluations

Back 56

lowering the value of money

Front 57

state of economy before WW2

Back 57

we taxed them they taxed us. slowed the world economy and made the depression worse

Front 58

state of economy after ww2

Back 58

end of depression, ww2 created demand for guns, etc.

Front 59

what happened at Bretton Woods?

Back 59

3 institutions were created
IMF
World Bank
ITO (International Trade Org)- however, this was never ratified by our congress and the GATT was created in place of this.

Front 60

GATT, define it.

Back 60

General Agreement of Tariffs and Trade. interim agreement to govern trade until ITO is ratified. this was around for 50 yrs.

Front 61

What changes have happened since 1940 to the IMF?

Back 61

instead of being pegged to an exchange rate, they switched to floating exchange rate