Sec 5 Contemporary World Villa Maria High School

 Chapter 12 and 13 ◦ “Key Terms” (definitions) and “Key Questions” (answers) from each chapter.  Chapter 28 ◦ Read the entire chapter. ◦ Focus on “Key Terms,” “Key Questions,” and “Knowledge and Understanding.”

 Definition: People working together to find a solution to a problem. 1.Socially Responsible Investing 2.Microcredit 3.Fair Trade

 1) What is socially responsible investing? Provide examples. Investing in companies that reflect your moral values. Ex., environmentalism:  “Green energy” and organic farming companies.  No mining companies or chemical manufacturers.

 2 a) Explain, in general, how microcredit works. Providing small sums of money to help people develop a better livelihood and break out of the cycle of poverty. (See Figure 28-3)

 2 b) How do the specific requirements of Grameen Bank loans contribute to the success of microcredit? ◦ Realistic and sustainable repayment terms. ◦ Loans geared towards economic growth. ◦ Support system and borrower accountability. ◦ Social development component.

 3 a) Why do commercial banks have little interest in helping the poor to build successful businesses in both developing and developed countries? ◦ Helping the poor is not profitable enough. ◦ No interest in social development. ◦ Small loans (e.g., $50 in Bangladesh, $1000 in Canada) are not worth the trouble.

 3 b) Explain how a microcredit system addresses this problem. ◦ Not focusing on profit making (only breaking even). ◦ Simplifying operations (no large staffs or buildings). ◦ Goals relate to social development, not profit.

 4) Briefly describe the comparative advantage that each of the following areas has in a globalized economy: ◦ a) United States ◦ b) Southeast Asia (including Vietnam, Cambodia, and Thailand) ◦ c) Japan

4 a) United States Advanced technologyPopular culture

 4 b) Southeast Asia (including Vietnam, Cambodia, and Thailand) A large workforce  inexpensive labour.

 4 c) Japan Cars and electronics

 5) How has free trade contributed to the economic marginalization of many workers in the developing world? ◦ Free trade eliminates tariffs. Poorer countries have difficulty competing without protective tariffs. ◦ Competition to keep production costs low forces farmers and workers to accept low wages. ◦ Producers use methods that harm workers (sweatshop conditions, use of toxic pesticides and herbicides) to increase output. Illnesses and injuries jeopardize workers’ ability to earn a living.