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Comparing EconomiesComparing Economies
International TradeInternational Trade
An Interdependent WorldAn Interdependent World
International TradeInternational Trade
International TradeInternational TradeNo country produces No country produces everything it needs to everything it needs to survivesurviveinternational international tradingtradingTrading helps county’s deal Trading helps county’s deal with problem of scarcitywith problem of scarcityCountries trade b/c they Countries trade b/c they have have comparative comparative advantageadvantage ability of a ability of a country to produce a good at country to produce a good at a lower cost than another a lower cost than another countrycountry
International TradeInternational Trade
Gov’t restricts some international tradeGov’t restricts some international trade “home” countries lose money“home” countries lose money– TariffTariff tax on imported goods tax on imported goods
QuotaQuotalimits on amount of good allowed limits on amount of good allowed
International TradeInternational Trade
Trade AgreementsTrade Agreements
Most countries aim for free tradeMost countries aim for free trade reduce trade reduce trade barriersbarriers
Many countries create free trade zonesMany countries create free trade zones– European UnionEuropean Union: organization of Euro nations: organization of Euro nations– NAFTANAFTA: North American Free Trade Agreement (US, : North American Free Trade Agreement (US,
Can, Mex)Can, Mex)– The World Trade OrganizationThe World Trade Organization: oversee trade : oversee trade
among nationsamong nations
International TradeInternational Trade
Economic SystemsEconomic Systems
Not all economic Not all economic systems are alikesystems are alike– Market EconomyMarket Economy: :
Private citizens own Private citizens own the factors of the factors of productionproduction
Individual freedom Individual freedom (what, how, for whom)(what, how, for whom)
CompetitionCompetition
Higher GDPHigher GDP
International TradeInternational Trade
Command EconomyCommand Economy: Individuals have little : Individuals have little influence on economic systeminfluence on economic system– Major economic decisions are made by gov’tMajor economic decisions are made by gov’t– Socialism:Socialism: means of production owned by means of production owned by
societysociety– Communism:Communism: Karl MarxKarl Marx believed socialism believed socialism
would evolve into communismwould evolve into communism one social one social class, common property, no gov’tclass, common property, no gov’t
– Gov’t ControlGov’t Control– Slow growthSlow growth
International TradeInternational Trade
– Mixed EconomyMixed Economy: Individuals are free, but : Individuals are free, but follow gov’t regulationfollow gov’t regulation
Free enterprise is combined with gov’t decisionsFree enterprise is combined with gov’t decisions
Gov’t acts as consumer and businessGov’t acts as consumer and business
International TradeInternational Trade
Economies in TransitionEconomies in TransitionSome countries are trying Some countries are trying to convert from a to convert from a command economy to a command economy to a mixed, or market, mixed, or market, economyeconomy– China, RussiaChina, Russia
Some countries are Some countries are considered to be considered to be developingdeveloping because they because they are trying to start a are trying to start a market based economy market based economy from scratchfrom scratch traditionaltraditional
Interdependent WorldInterdependent World
An Interdependent WorldAn Interdependent World
Ppl/countries all over world depend on Ppl/countries all over world depend on each other for goods/serviceseach other for goods/services
US relies on massive imports of fuel from US relies on massive imports of fuel from other nationsother nations
We sell wheat, computers, machineryWe sell wheat, computers, machinery
Interdependent WorldInterdependent World
Global IssuesGlobal Issues– Growing problem is economic Growing problem is economic inequalityinequality
among nationsamong nations 35 rich; 165 poor 35 rich; 165 poor– Most poor nations have Most poor nations have traditional traditional
economies, but are considered economies, but are considered developingdeveloping nations because they are trying to nations because they are trying to industrializeindustrialize
– Environmental destructionEnvironmental destruction acid rain, acid rain, increase conservationincrease conservation
– Drug trafficking, millions of Drug trafficking, millions of refugeesrefugees, , terrorismterrorism
Interdependent WorldInterdependent World
The United Nations- 1944The United Nations- 1944InternationalismInternationalism countries should come countries should come together to promote common aimstogether to promote common aimsUnited Nations goalsUnited Nations goals– Maintain international peaceMaintain international peace– develop friendly relations among countriesdevelop friendly relations among countries– promote justice and cooperationpromote justice and cooperation– seek solutions to global problemsseek solutions to global problems
UN often contributes peacekeeping soldiers to UN often contributes peacekeeping soldiers to war torn countrieswar torn countries
Interdependent WorldInterdependent World
Human RightsHuman Rights
Basic freedoms that all ppl. should enjoyBasic freedoms that all ppl. should enjoy safety, food, sheltersafety, food, shelter
Many countries violate ppl. for speaking Many countries violate ppl. for speaking personal opinions- China, Cuba, Sudanpersonal opinions- China, Cuba, Sudan
Universal Declaration of Human RightsUniversal Declaration of Human Rights– 1948- Protection of rights, raise standard of 1948- Protection of rights, raise standard of
livingliving
Interdependent WorldInterdependent World
UN security council holds UN security council holds tribunalstribunals (courts) to hear cases about violations of (courts) to hear cases about violations of human rightshuman rights
Tribunals hear cases about Tribunals hear cases about genocidegenocide mass killing of group of ppl (Darfur, mass killing of group of ppl (Darfur, Sudan)Sudan)
UN encourages spread of democracy and UN encourages spread of democracy and human rightshuman rights US foreign policy US foreign policy
Interdependent WorldInterdependent World
South AfricaSouth Africa– ApartheidApartheid racial racial
separation between separation between white and blackwhite and black
– UN and EU ordered UN and EU ordered economic economic sanctionssanctions(punishment(punishment) against South Africa) against South Africa
– 1994-1994-Nelson MandelaNelson Mandela became 1st AA became 1st AA presidentpresident
Interdependent WorldInterdependent World
Cold WarCold War– Years following WWII, Joseph Stalin, of Years following WWII, Joseph Stalin, of
Russia, forced surrounding countries to Russia, forced surrounding countries to become become satellitessatellites
– World divided between Communism (SU) and World divided between Communism (SU) and Democracy (US)Democracy (US)
– 1989- Communism ends in Russia1989- Communism ends in Russia