INR 2002 Final Exam Study Guide 1 Democratic Peace Phenomenon Democracies don t go to war with each other 2 Why is spreading democracy so hard Some cultures are just not compatible with democracy Democracies are more likely to survive from an internal movement that an external factor 3 Germany and Japan after WW II Exceptions to democracies not surviving after an 4 Globalization the increasingly global relationships of culture people and economic external factor activity 5 Currency Convertibility Convertibility of a currency determines the ability of an individual corporate or government to convert its local currency to another currency or vice versa with or without central bank government intervention 6 Political Economy The study of the intersection between politics and economics 7 Supply and demand an economic model of price determination in a market It concludes that in a competitive market the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers at current price will equal the quantity supplied by producers at current price resulting in an economic equilibrium of price and quantity 8 Absolute advantage The ability to produce a good or service at a lower cost than anyone else 9 Comparative advantage the relative efficiency with reach resources can be employed to produce goods or services such that A is relatively better at producing X than it is at producing Y compared to B thereby conferring comparative advantage on A in the production of X 10 Opportunity costs The price in terms of the foregone alternative courses of action or use of resources the available resources 11 Production Possibility frontier The maximum mix of goods that can be produced given 12 Equilibrium Price The price determined by the intersection of supply and demand curves for a product or service 13 Tariffs Government taxes or levies on imported goods or services that are not also applied to comparable products or services that are produced domestically 14 Free Trade a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs to imports or subsidies to exports 15 Fair Trade Economics exchange between nations regulated by the principle that one nation should not sell goods to another nation at a price below the price at which the goods are sold in the producer country Also includes the idea that countries should try to achieve a rough balance or equality in their trade with one another 16 Currency floating A currency whose value is set by the currency markets money whose exchange rate relative to other currencies is determined mainly or entirely by unrestricted trading in the currency 17 Nontariff Barriers Measures other than tariffs designed to reduce foreign competition 18 Labor mobility The case with which labor can be moved from one industry or locale to another to another 19 Capital mobility The case with which capital can be moved from one industry or locale 20 Trade openness and income equality the openness we have with other countries with trade has proven to increase income equality 21 Foreign aid Assistance given one country or organization to another country to improve conditions in the recipient state 22 Marshall Plan the large scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to prevent the spread of Soviet communism 23 Types of government adversary Responsive and repressive Responsive will try to negotiate and talk with an organization A repressive government will enact policies to suppress the organization 24 International Law a body of law that applies to relations between states or between citizens in different countries 25 Examples of International Organizations Alliance of Small Island States North American Free Trade Agreement North Atlantic Treaty Organization Organization of Arab Petroleum Exporting Countries 26 Role redefinition the re creation of a decision maker s or nation s identity as the function of the part it is assigned in an international organization or series of interactions 27 Treaty of Westphalia The treaty among European nations signed in 1648 which laid out specifications regarding sovereignty Remains relevant in international interactions today 28 Sovereignty the right and authority to rule within a specified usually geographic domain 29 Helsinki Final Act an agreement signed by most European powers in 1975 that recognized the sovereignty of East Germany and West Germany in exchange for oversight rights by governments and human rights groups regarding human rights in the Soviet bloc countries 30 Shadow of the Future The value a player attaches to future benefits as compared to present benefits 31 The United Nations an international organization whose stated aims are facilitating cooperation in international law international security economic development social progress human rights and achievement of world peace The UN was founded in 1945 after World War II to replace the League of Nations to stop wars between countries and to provide a platform for dialogue It contains multiple subsidiary organizations to carry out its missions 32 The temptation to cheat If everyone follows the rules or laws then the temptation to cheat is strong 33 The Maersk Alabama a series of events involving piracy that began with four Somali pirates seizing the cargo ship MV Maersk Alabama 240 nautical miles 440 km 280 mi southeast of the Somali port city of Eyl It was the first successful pirate seizure of a ship registered under the American flag since the early 19th century 34 Modern day Piracy Pirates off the coast of Somalia hijack cargo ships of all nations take their goods and sometimes hostages 35 When is foreign aid more likely to work It is mostly like to work when it is not given to dictatorships because the dictators will just use it for their own gain and it will most likely work when it is in the peoples who receive the aid best interest when it is best in the long run 36 When is foreign aid more likely to be needed After a natural disaster or when people are under a dictatorship 37 Tragedy of the commons the over consumption of a common pool resource a resource that is non excludable but is divisible 38 2004 Madrid Train Attack A terrorist attack that killed hundreds and injured more Brought on by the controlling parties support for the Iraq war The party
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