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Test 2- POLI 101
Flash Cards for POLI 101 test 2
69
Political Studies
Undergraduate 1
10/31/2010

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Term

What is Economics?

 

Give some background details.

Definition

the allocation of resources in the time of scarcity

Ex: land, labor, capitol

 

*closely tied with politics because it deals with power

*deals with supply and demand

Term

Explain:

 

GNP

GDP

PCI

BOP

HDI

Definition

GNP: Gross National Product (overall value that nations produce)

 

GDP: Gross Domestic Product (the average income per person in a country)

 

BOP: Balance of Payments; Money between countries with respect to trade; good to be a positive amount so you don't have debt.

 

HDI:  Human Development Index; it is non quantitative numbers; looks at aspects such as health and education.

Term
What is debt?
Definition
Debt is what a country owes to another country
Term
What are the Key Actors in Economics?
Definition

State: invests and promotes investments; gov't works closely with Big Business; governments demand goods

 

MNC's:  Generates most wealth; MNCs need the state

 

IOs: involved more in the details and effects of the situation; involved in debt; ex. United Nations

 

Individual: has alot of control in what the consumer wants

Term
What is wealth?
Definition

can be defined in many ways:

 

Money, Time, Values, Resources

Term
What are the Theoretical Schools of Economics?
Definition

Market:  Through Liberalism and Capitalism; it is essential to creating equity and peace

 

State:  Socialism; state must help the consumer so the market does not abuse consumers; Gov't must ensure wealth is being distributed.

 

Community:  "third way economics"; Karl Marx created it; Relevant in most of the developing worlds; Trusts in government as long as it doesnt try to crush the economy.

 

Term
What are the Schools of I.R. Theory in relation to economics?
Definition

(same as others)

 

Realists (mercantilism): believes in whatever works; not just the government or the economy; mercantilism is a type of Realism; Focuses on trade

 

Idealism (Liberalism/Capitalism):  most related Economic School and IR School; what America has.

 

Marxism (communism); distrobution of wealth

Term
What is BOP?
Definition

Balance of Payments

 

Imports v. Exports

 

Want this to be a postive number

Term

What is Comparative Advantage?

 

Definition

Trading with countries that produce a specific produce easier and cheaper than your country does.

 

Truly benefits industrial countries, not agricultural ones.

Term
What is Autarky and Protectionism?
Definition

Autarky: 

when a country isolates itself from the world and tries to "get by"; a realist strategy; sometimes better to fix internal stuff before dealing with international trade;  Example: China

 

Protectionism:

Use protection to protect their economy; another realist strategy

Term
What is the WTO/GATT?
Definition

WTO:  World Trade Organization

-wants to elimanate terrorism to create a truly world economy

 

GATT: General Agreement on Tariffs and Trade (within WTO)

 

 

 

Term

What is are Free Trade Agreements?

 

Definition

-Between several countries

-agree to trade goods and labor more freely

-don't last as long because markets change

***very difficult to do these effectively

Term
What is Interdependance?
Definition

an idealist view of the world

Driven by free market ideas and integrates the economy

 

Problems:

not everyone can win (competitve)

some say it is a form of western imperialism

 

will all countries benefit? can people be happy?

Non-industrial so not everyone can win

Term
What is the difference between Floating and Fixed Exchange Rates?
Definition

Floating: follows free market and supply and demand

 

Fixed: Government fixes the value of their currency in relation to a different currency

Term
What is the difference between Hard and Soft Currency?
Definition

Hard:  Means that it has value outside the country

 

Soft:  means that it doesnt have value outside the country

Term
What are different examples of "Currency Institutions?"
Definition

Central Banks:  Print Money and hold it (like the Federal Reserve)

 

IMF/ World Bank

Term
How does Fair Trade differ from Free Trade?
Definition

Fair Trade: 

-Focused on agriculture; it is the largest sector of employment

-created to overcome big business in agriculture

-created to give a break to the smaller poorer farmers sot ehy can get into internation market

Term
What are some criticisms of Fair Trade?
Definition

-Industrial Countries are more able to get involved in trade

-When it comes to natural resources, there are many producers and few buyers;  esp in agriculture, prices are more likely to be low

-don't cater to a diversified market

Term
Give some facts about Trade.
Definition

Trade has been around for thousands of years

 

Trade Defines Globalization

 

Finding a niche is the cornerstone of free trade

 

If in a bigger country, it can be more difficult to find a niche

Term
what is the most important international actor?
Definition

Multi-National Corporations

 

(they are very powerful)

Term
What are some characteristics of the Global South?
Definition

-Third World, Less Developed Countries

-Defined by Economics

-The countries that do not have modern ideas of institutions

-the economy has not developed modern infrastructure or organization

Term
How does Poverty relate to the Global South?
Definition

Country's Characteristics:

-lack of food, water, clothing, shelter

-usually refers to lack of material goods and some people say lack of security

-bad water kills more than cancer

-the city in the global south are the poorest places

Term
What Economics Actors Cause Poverty?
Definition

Market Theories:  Says that the government doesn't promote the spread of the market; there needs to be a secure base for economic growth and trade

 

Statist Theories:  (undistributed wealth, corruption common)

-Marxism: sees capitalism as unequal; you need a global govt

-Colonialism: west is overdeveloped and rest of world is opposite

 

Communitarian Theories:  Market and statist address whats going on in the village; says capitalism and socialism are guilty of "top down"; will argue that you dont create alot of revenue but you create stability.

Term
Give Characteristics about Debt.
Definition

Debt is a problem everywhere

 

it is normal for Countries to borrow money and it only becomes a problem when it can't be paid back.

 

when a country's economy can't generate enough income to pay loans, the interest accumulates and breaks the country.

 

Interest on Debt does not go away.

Term
What is National Debt?
Definition
the total amount of money owed to its creditors
Term
What conditions led to the "Debt Problem?"
Definition

Began in the 1970s, most countries of global south gained independency in the 60s; oil was booming and banks had lots of money

-commodity prices were good (esp oil)

-inflation was high (do want to borrow money)

-banks were eager to loan money

Term

What specific group of countries in the global south are not facing too much debt?

 

Which country has the most debt?

Definition

Oil Producing Countries!!!

 

 

Brazil

Term
What happened to create the "Debt Problem?"
Definition

-Developing Countries needed money

-commodities bottomed out in the 80s; inflation set in.

-Money was no longer available to lend

Term
Why would a country be unable to repay loans?
Definition

*Structure of the Economy:

-inelasticity with repect to income

-that country may only sell common, cheap goods so the price per item is very low

 

*Corruption and other political problems

 

Term
What are some Solutions to the "Debt Problem?"
Definition

*The International Monetary Fund

-deals with BOP; can be called into aid with "SAPs"

 

*The World Bank/The World Trade Organization

-WTO wants less restrictions on trade to increase production and revenue, however, this is where the poor and environment gets messed up (to fix problem, income is essential); Similar to SAP

 

Term
What does S.A.P stand for and what does it do?
Definition

-Structural Adjustment Programs

 

Helps countries with Debt:

-Would Start by reducing the government sector

-promoting private business in the market place

-devalues currency

Term
What are some results of Structural Adjustment Programs?
Definition

Have been mostly successful, but have made living even harder for the poor.

 

Cause human and ecological displacement

Term
What is the "American Case?"
Definition

***America's relation to debt

 

-We break all the debt rules, all the time

Why?

 

-we created the system

-our debt fuels the entire global economy

-over half of the US debt is held by foreign countries

Term
How is Foreign Aid different from Debt?
Definition
It is more like a welfare payment
Term
What are the 2 types of Aid Relations?
Definition

*Bi-Lateral: 

Where one country invests aid in another country.

Example:  USAID- focuses on projects such as education health and infrastructure

 

*Uni-lateral:

-International organizations (IOs); one country only involved

-agency to country.  ex: United Nations

Term
What are the 3 types of Development Assistance Models?
Definition

Disaster Relief Models:

-deals with short term effects of a disaster

 

Missionary Model:

-oldest type of aid; operate at the local level

-short or long term; mostly christian affiliations

-based on charity

 

Oxfam Model:

-Grew after WWII; is an I.O.; goal is to engage with communitry over a long term to help out; more of a partnership.

Term
Why is Oil so important?
Definition

*It is an essential Energy Source

-could be one of the most important commodity ever

-basis of all modern business

-modern world built on oil

 

*(The Fungability of Oil

-it is very versitile (energy source, mobility, manufacuturing, construction, etc...)

 

***You come in contact with oil everyday!!!

 

*7 sisters:

-the seven oil companies that built the oil economy

Term
What were the 7 Sisters?
Definition

the 7 oil companies that built the oil economy

 

-Exxon, Mobile, Gulf, Texaco,Chevron, BP, Royal Dutch Shell

 

-5 of the 7 are American Companies

Term
When was the Discovery of Oil and who was the first man that made a huge impact in Oil?
Definition

*1900

 

*John D Rockafeller

-he created the first oil company

-he was the precursor to big business

-created the first oil monopoly called Standard Oil

Term
What was Standard Oil and when was it broken up?
Definition

*the first Oil Monopoly created by John D Rockafeller

 

*1911

Term
What happened in the 1920s and 1930s in relation to oil?
Definition
America was running an oil and automobile economy while Europe was decades behind.
Term
What was the Red Line Agreement and what did it do?
Definition

-Allowed America and Britain to monopolize oil

 

-Established the US's hegemony in the Middle East

Term
What does OPEC stand for, when was it created, and who is the largest country within the I.O.?
Definition

*Oil Producing Export Countries

 

*1960

 

*Saudi Arabia

Term
What were the 1973 and 1979 Oil Shocks?
Definition

Demand for Oil was increasing dramatically bc people were getting cars and oil producing countries began to nationalize their production giving them more of the profit

 

Bad because the US got less oil.

Term
What was the 1980's Oil Price Drop?
Definition

-Technological break throughs allowed oil to go back down

 

-Energy Consumption Dropped

 

-New Supplies were found in places such as the North Sea

Term
What is Peak Oil and what are some countries that have already peaked?
Definition

*the point where oil production is largest in a country

-doesn't mean that you run out of oil, just means that you can't produce a greater amount

-key indications are no new projects

 

*US and Mexico has already peaked

Term
Who are the top two oil producing countries?
Definition

1: Saudi Arabia

 

2: Russia

Term

What is central to US foreign policy and for how long?

 

What is the most sensitive area of US Foreign Policy?

Definition

Oil; since WWII

 

OIL!!!

Term
The US is #1 consumer per capita in what commodity?
Definition
Oil
Term
What is the relationship between the US and Saudi Arabia?
Definition

The US wants to keep good relations with top oil producing countries like S.A. because we require so much oil.

 

We depend on each other because they need our demand and money and we need the oil.

 

There is speculation that they have ties to Terrorism

Term
What are examples of Sources of Conflict between the US and the Middle East?
Definition

*Religion (Christianity v. Islam)

 

*Competiviness between the US and other countries for oil.

 

*Israel (Islam v. Judism but we are allies with them)

 

*Oil is the only thing stabilizign the Middle East's Economy

-we need to keep Oil producing Countries internally stable.

 

*Human (or womens) Rights/ Environmental Standards

Term
What are some questions that get raised about the Future of American Foreign Policy?
Definition

Should America continue to spend money to keep the Oil lanes open?

 

Should America reform our Energy Policy?

 

Does our dependence on Oil create enemies for the US?

 

Should the Govt and big business make finding an alternative to oil a priority?

Term

What are PetroStates and how will this become important in the Future?

 

What are some examples of PetroStates?

Definition

*Countries that have reserves of Oil

-as oil becomes more scarce, countries will get more competitive for oil.

 

*Iran, Canada, Russia, Saudi Arabia, Venezuela

Term
What are some domestic consequences of oil?
Definition

*shortages = higher prices

 

*Suburban Sprawl

-everything based on the function of oil

-Would become the American Way of Life

 

*Industrial Agriculture

-prices of goods depend on oil prices

 

*Transportation

-interstate system helps US grow economically

 

*Informatioin Economy

-everything is made of plastic (oil product) so the ways things are electronically delivered (server farms) uses lots of energy.

Term
What are some Global Consequences of Oil?
Definition

*Global Wealth Shifts

-wealth will leave the producing countries and power will shift too

 

*Political Instability

-countries that lose wealth may become unstable; corruption

 

*Rejection of OPEC

-Rogue Countries  that are oil producers want to make deals too

 

*Aid Mobilization of Poor

-some of the oil producers use their to help the poor countries

 

*New Global Allignments

-Economic and Political; ppl will team up against others

 

*New Energy Paradigm

-Mixture of different energy sources

Term
How large is China?
Definition
1.4 Billion and Growing
Term
What are some facts about China's Economy?
Definition

-Second Largest economy in the world (after US)

-Largest Manufacturer in the World

-Largest Energy Consumers in the world

-Second largest Oil consumer

-400 of the 500 Fortune 500 companies relate there

-80% of Walmart products make in China

Term
How has China (ancient) contributed to the World?
Definition
-Gun Powder, History, Science, Written Language
Term
How did WWII affect China?
Definition

-Was still going through internal issues; communists were active

-suffered 20-30 million dead from Japanese invasion

-Communism Grew after the War.

Term
Who was Mao Zedny?
Definition

-(1949-1976)

-First communist ruler of China; changed China to a Modern Economy from a fuedal one.

-Created a new economic plan (Autarky)

-many ppl died under him bc of collective farming

Term
Who was Deng Xiaping?
Definition

-(1976)

 

-great warrior (fought with his armies)

-Started an open door policy in China

Term
What is China's economy like today?
Definition
Still socialist domestically but uses captialism to become a huge global power.
Term
What happened in Tiananmen Square?
Definition
In 1989, there were political protests over freedom in China and people were killed.
Term
What is/could be the future of Democracy and Reform in China?
Definition

*Authoritarian Systems

-wants stability and predictability and this type of govt gives that.

-lots of restrictions on speech and human rights

Term
What are some questions that are asked when discussing Chinese-American Relations?
Definition

How many jobs should be sent to china?

 

How dependent are we on Chinese goods?

 

How will the competition for Oil between the two powers play out?

Term
What are some areas of concern between China and America when dealing militarily or with other allies of the countries?
Definition

*Both have huge militaries

 

*Taiwan:  What will the US do if China invades it?

 

*Japan: Major trading partner with US but what if the Chinese try to alliance with them along with Korea against the US?

 

*Middle East/Oil:  What if China alliances against the US with middle eastern countries and we get less oil?

Term
What is Human Rights like in China?
Definition

-25% of the chinese population is extrememly poor and live in bad conditions

 

-Tibet:  China annexed Tibet destroying hundreds of temples and lots of culture.

Term
What are some problems could arise in the Future for China?
Definition

*Aging Population

-need someone to follow but they have child restrictions

 

*Energy Shortages

 

*Loss of Farmland

-bc of suburban sprawl

 

*Health and Pollution Problems

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