Political Responses to Global Market Forces - AP Comparative Government & Politics

To facilitate and increase trade between member countries. Reduces barriers to create larger, more integrated markets.

It can make exports cheaper and imports more expensive. Weaker currency boosts export competitiveness while raising import costs.

To protect domestic industries from cheap imports. Tariffs make foreign goods more expensive than domestic alternatives.

Offshoring describes relocation to low-cost countries. Companies move operations abroad to reduce labor and production costs.

Globalization refers to the integration of economies, cultures, and politics across borders. Encompasses economic, cultural, and political interconnectedness worldwide.

Trade protectionism is a key response. Governments use this to shield domestic industries from foreign competition.

A quota is a limit on the quantity of a good that can be imported. Restricts import volume to protect domestic market share.

The World Trade Organization (WTO) promotes trade liberalization. Sets global trade rules and resolves trade disputes between nations.

The IMF promotes global financial stability. Provides loans and monitors global monetary system stability.

Economic sovereignty means control over one's own economic policy. Nation's ability to make independent decisions about its economy.

Implementing social safety nets is a strategy. Programs like unemployment benefits cushion globalization's negative effects.

Fiscal policy focuses on government spending and taxation. Government uses budget tools to influence economic activity.

Classical trade theory supports comparative advantage. Countries should specialize in goods they produce most efficiently.

Tariff escalation refers to higher tariffs on processed goods than raw materials. Encourages countries to export raw materials rather than finished products.

They can lead to lower consumer prices. Reduced tariffs and barriers lower costs for consumers.

A trade deficit can lead to increased foreign debt. Importing more than exporting requires borrowing to finance gap.

Monetary policy interventions can counteract currency appreciation. Central banks adjust interest rates to influence currency values.

Globalization can lead to cultural homogenization. Global integration can erode distinct local cultural identities.

Localization supports local economies. Prioritizes regional production and consumption over global trade.

The G20 promotes international financial stability and cooperation. Forum for major economies to coordinate financial policies.

Economic liberalization involves reducing government role. Privatization and deregulation increase market-based decision making.

To prevent foreign producers from selling goods below cost to harm domestic industries. Protects against unfair pricing that undercuts domestic competition.

Economic inequality can lead to social unrest and political instability. Wealth disparities can trigger protests and undermine government legitimacy.

Economic inequality is the unequal distribution of wealth and income. Gap between rich and poor in wealth and income distribution.

FDI stands for Foreign Direct Investment. Investment where foreign entities acquire control in domestic businesses.

Economic growth and job creation in the host country. Foreign investment brings capital and creates employment opportunities.

Economic nationalism prioritizes domestic control over the economy. Emphasizes protecting national economic interests over global integration.

Protectionist policies seek to protect domestic industries. Shields local businesses from international competitive pressures.

Liberalization refers to reducing government restrictions in the economy. Promotes free market principles by reducing state intervention.