ECON-201
Review for Final
Dr. Bell
WS03

International Trade and Finance

-- How can the Production Possibilities Curve be used to demonstrate the benefits of free trade?
-- What assumptions does the free trade/PPC argument rest upon?
-- What is meant by Free Trade?
-- Free trade opponents often argue in favor of "protectionism". What is this?
-- What is an embargo?
-- What is a tariff?
-- What is a quota?
-- What are some of the arguments in favor of protectionism? (List and describe four of them.)
-- What is NAFTA? Which countries does it involve? What kinds of benefits did it promise?
-- What is the balance of payments?
-- What does the current account record?
-- What kinds of transactions does the capital account record?
-- How are the current account and the capital account related?
-- What is an exchange rate?
-- How are exchange rates determined?
-- What does it mean to say that a currency has "depreciated"? "Appreciated"?

Dollars and Sense

-- What was the Kearney Report, and what was its main conclusion?
-- Can you criticize the Kearney Report using a "correlation" vs. "causation" argument?
-- The authors of "Know-Nothings and Know-It-Alls" argues that every developed country that has raised its living standards has done so through managed trade rather than free trade. List a few of the countries he refers to.
-- In "The ABCs of ‘Free Trade’ Agreements", it is argued that "goods and capital pass freely across national frontiers while people run a gauntlet of border patrols and barbed wire" p. 120). What is meant by this?
-- What are the maquiladoras?
-- What was the FTAA designed to do? Did it pass? Why not?
-- Why do the authors of "The ABCs of ‘Free Trade’ Agreements" argue that "open trade within the EU poses less of a threat for wages and labor standards than NAFTA or the WTO"?
-- What is the ASEAN and how has it evolved since its founding in 1967?
-- Why is it argued that China’s entry into the WTO threatens ASEAN interests?
-- In "Reforming the IMF", Ellen Frank discusses the Global Sustainable Development Resolution developed by Congressman Bernie Sanders. -- What kinds of reforms does the resolution propose? (List five.)
-- Currently, the richest countries (e.g. the U.S.) have the most votes at the IMF and World Bank. The Congressman’s resolution proposes that votes be distributed more democratically. How?
-- Since their founding, the president of the World Bank has always been a citizen ________ and the president of the IMF has always been a citizen of ________.
-- The IMF and the World Bank are both lending institutions, but they serve different functions. Distinguish IMF lending from World Bank lending.
-- Lending by the IMF and World Bank is typically contingent. In what way(s) do these institutions make "contingent" loans?
-- Where are most of the clothes sold in your University bookstore manufactured?
-- What kinds of "changes" have factories been known to make just prior to an inspection of its plant (assuming it has prior knowledge of the visit)?
-- What is "outsourcing"?
-- Many universities, concerned about the conditions under which their garments are manufactured, have joined one of two organizations that inspect and evaluate compliance with "codes of conduct"
-- What is the largest private company responsible for monitoring global codes of conduct, and why does Ellen Frank argue that this firm has failed to uphold these codes?