Comparing Economies International Trade An Interdependent World

International Trade No country produces everything it needs to survive  international trading Trading helps county’s deal with problem of scarcity Countries trade b/c they have comparative advantage  ability of a country to produce a good at a lower cost than another country

International Trade Gov’t restricts some international trade  “home” countries lose money –Tariff  tax on imported goods Quota  limits on amount of good allowed

International Trade Trade Agreements Most countries aim for free trade  reduce trade barriers Many countries create free trade zones –European Union: organization of Euro nations –NAFTA: North American Free Trade Agreement (US, Can, Mex) –The World Trade Organization: oversee trade among nations

International Trade Economic Systems Not all economic systems are alike –Market Economy: Private citizens own the factors of production Individual freedom (what, how, for whom) Competition Higher GDP

International Trade Command Economy: Individuals have little influence on economic system –Major economic decisions are made by gov’t –Socialism: means of production owned by society –Communism: Karl Marx believed socialism would evolve into communism  one social class, common property, no gov’t –Gov’t Control –Slow growth

International Trade –Mixed Economy: Individuals are free, but follow gov’t regulation Free enterprise is combined with gov’t decisions Gov’t acts as consumer and business

International Trade Economies in Transition Some countries are trying to convert from a command economy to a mixed, or market, economy –China, Russia Some countries are considered to be developing because they are trying to start a market based economy from scratch  traditional

Interdependent World An Interdependent World Ppl/countries all over world depend on each other for goods/services US relies on massive imports of fuel from other nations We sell wheat, computers, machinery

Interdependent World Global Issues –Growing problem is economic inequality among nations  35 rich; 165 poor –Most poor nations have traditional economies, but are considered developing nations because they are trying to industrialize –Environmental destruction  acid rain, increase conservation –Drug trafficking, millions of refugees, terrorism

Interdependent World The United Nations Internationalism  countries should come together to promote common aims United Nations goals –Maintain international peace –develop friendly relations among countries –promote justice and cooperation –seek solutions to global problems UN often contributes peacekeeping soldiers to war torn countries

Interdependent World Human Rights Basic freedoms that all ppl. should enjoy  safety, food, shelter Many countries violate ppl. for speaking personal opinions- China, Cuba, Sudan Universal Declaration of Human Rights –1948- Protection of rights, raise standard of living

Interdependent World UN security council holds tribunals (courts) to hear cases about violations of human rights Tribunals hear cases about genocide  mass killing of group of ppl (Darfur, Sudan) UN encourages spread of democracy and human rights  US foreign policy

Interdependent World South Africa –Apartheid  racial separation between white and black –UN and EU ordered economic sanctions(punishment ) against South Africa –1994-Nelson Mandela became 1st AA president

Interdependent World Cold War –Years following WWII, Joseph Stalin, of Russia, forced surrounding countries to become satellites –World divided between Communism (SU) and Democracy (US) –1989- Communism ends in Russia