Economics in the Global Age - AP World History

1. What is the purpose of economic sanctions?

   To influence a country's behavior by restricting trade or financial flows. Economic pressure serves as a diplomatic tool for policy change.

2. What is outsourcing in economic terms?

   Contracting out business processes to external parties. Companies delegate tasks to external providers to reduce costs.

3. Identify one potential drawback of rapid economic growth.

   Environmental degradation. Rapid industrialization often harms natural resources and ecosystems.

4. Identify one advantage of being in a trade bloc.

   Increased market access for member countries. Members face fewer trade barriers within their regional group.

5. What is the primary goal of protectionism?

   To protect domestic industries from foreign competition. Uses barriers like tariffs to shield local producers.

6. What is a subsidy?

   A government payment to support a business or market. Governments use these to support specific industries or activities.

7. What is a trade deficit?

   When a country's imports exceed its exports. This creates an imbalance in a nation's trade account.

8. What does the term 'capital mobility' refer to?

   The ease with which capital or investments can move across borders. Money flows freely between countries for investment purposes.

9. What is the role of transnational corporations in globalization?

   Facilitating global trade and investment. These companies drive economic integration across borders.

10. Identify one major effect of globalization on trade.

    Increased international trade and interdependence. Nations become more connected through expanded cross-border commerce.

11. What is the primary focus of sustainable development?

    Meeting current needs without compromising future generations. Balances economic growth with environmental and social responsibility.

12. What is the 'digital divide' in global economics?

    The gap between those with and without access to digital technology. Technology access creates economic advantages for some regions.

13. What is economic liberalization?

    The reduction of state involvement in the economy. Shifts from government control toward market-based mechanisms.

14. Identify one benefit of fair trade practices.

    Improved working conditions for producers. Workers receive better wages and safer working environments.

15. Identify one role of non-governmental organizations (NGOs) in global economics.

    Advocating for sustainable and ethical business practices. These organizations promote corporate responsibility and social justice.

16. Identify one argument against globalization.

    It can lead to cultural homogenization. Critics worry about losing local cultures and traditions.

17. What is the main function of the World Trade Organization (WTO)?

    To regulate international trade and resolve disputes. Acts as the global referee for international trade agreements.

18. Identify one key component of sustainable development.

    Environmental protection. Combines economic development with ecological conservation efforts.

19. Which institution provides long-term loans for development projects?

    The World Bank. Focuses on poverty reduction and infrastructure development worldwide.

20. Identify one benefit of free trade.

    Access to a wider variety of goods and services. Consumers benefit from increased choice and competitive prices.

21. What is 'foreign direct investment' (FDI)?

    Investment made by a firm or individual in one country in business interests in another country. This creates lasting economic ties between countries.

22. What is the impact of tariffs on imported goods?

    They increase the price of imported goods. These taxes make foreign products more expensive for consumers.

23. Identify one key feature of a market economy.

    Decentralized decision-making by individuals and firms. Private actors make economic choices based on supply and demand.

24. What is economic inequality?

    The unequal distribution of wealth and income. Globalization can worsen disparities between rich and poor.

25. Name one example of a trade bloc.

    European Union (EU). This bloc represents one of the most integrated trade regions.

26. Identify one negative impact of economic globalization.

    Job losses in domestic industries due to outsourcing. Workers face unemployment when production moves to cheaper locations.

27. Name one major challenge of global economic integration.

    Balancing national interests with global cooperation. Nations must balance sovereignty with international economic commitments.

28. What is a tariff?

    A tax imposed on imported goods. This trade barrier raises revenue while protecting domestic producers.

29. What is a key feature of a command economy?

    Centralized government control of resources and production. The state directs economic activity through central planning.

30. Which organization was established to promote global trade in 1995?

    World Trade Organization (WTO). Replaced GATT to oversee global trade rules and dispute resolution.

31. What is a multinational corporation (MNC)?

    A company that operates in multiple countries. These corporations expand operations beyond their home country borders.

32. What does the term 'economic interdependence' mean?

    Countries are mutually reliant on each other economically. Global integration creates mutual dependence between national economies.

33. Name the agreement that created a free trade zone between the US, Canada, and Mexico.

    North American Free Trade Agreement (NAFTA). Eliminated most tariffs between these three North American nations.

34. What is the term for the relocation of business processes to lower-cost locations abroad?

    Offshoring. Companies move operations abroad to reduce labor and production costs.

35. What is the purpose of the International Monetary Fund (IMF)?

    To stabilize international exchange rates and financial systems. Provides financial assistance and promotes monetary cooperation globally.

36. Identify one consequence of increased capital mobility.

    Greater investment opportunities and risks. Capital flows can boost economies but create financial instability.

37. What is fair trade?

    A movement aimed at ensuring fair prices and wages for producers. Ensures ethical treatment and compensation for developing world producers.

38. What is a trade bloc?

    A group of countries that have agreed to reduce trade barriers among themselves. Members enjoy preferential trading relationships within the group.

39. What is globalization in the context of economics?

    Globalization is the integration of global markets and economies. This process connects economies worldwide through trade and investment.

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