The International Economy

Trade Restrictions and free trade agreements Tariffs-tax on imports Quota- legal limit on amount that can be imported Free Trade agreements Reduce tariffs and quotas Lower trade barriers European Union, NAFTA

Balance of payments Trade surplus and Trade Deficit

Developing economies and industrial Market Economies Developing Countries Lower GDP Lower literacy rate High Unemployment Underemployment Rapid population growth Industrial Market Economies Most western countries Economically advanced

Foreign Trade and Migration Import Substitution- name new products similar to imported ones Export Promotion International Migration Move from poor countries to rich countries Brain Drain

Foreign Aid Foreign Aid- funds given by large economies to spur economic development Bilateral Aid- one country to one country Multilateral Aid- organizations provide aid US Agency for International Development (USAID) Further us interest by expanding democracy and free markets Improve standard of living around the world

Infrastructure Physical Infrastructure transport, communication, energy Sanitation airports

Economies in Transition Privatization Convergence Theory- developing countries can close gap and can grow at faster rate