Lecture 2 Notes

Lecture 2 Notes - Garrett Brnger Lecture 2(of notes 3rd...

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Garrett Brnger 1/24/08 Lecture 2 (of notes, 3 rd Lecture overall) Economic Terms: Imports Exports Balance of trade Balance of payments (current account + capital account = 0) includes tourism Tariffs – source of income/revenue for poorer countries; Weak because of the elites (who have power of military and serve their own interests) Elite governments are more vulnerable to external and internal pressures; Very hard for 3 rd world governments to tax their citizens – few to pay them, and those with money feel there is no obligation to pay for the benefits of others. Taxes on trade – way to acquire revenue (tariff) Hard Currency – strong currencies in the world (Yen, Euro, US Dollar) Soft Currency – weaker currencies Remittances – money sent back to where one comes from (Indian who sends money back to India) Part of the new immigrant lifestyle – help family back home. (send money by wire). Can be done by banks (initiated by Western Union) Source of hard currency – helps governments in the balance of payments Commodities – used for goods/primary products (natural resources and agricultural products) What Aid Is Money lent or items sold below commercial rate; Comes in the form of a grant, but most of it comes in the form of loans.
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