pol sci terms test 3 - Mercantilism-an economic theory and...

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Mercantilism —an economic theory and a political ideology opposed to free  tradel it shares with realism the belief that each state must protect itw own  interests w/o seeking mutual gains through internation organizations Comparitive advantage —the principle that says states should specialse in  trading those goods that they produce with the greatest reative efficiency and at  the lowest relative cost Balance of trade —general concept of one of more states power being used to  balance that of another state of group of states.  Interdependance —a political and economic situation in which 2 states are  simultaneously dependant on each other for their will-being. The degree of  interdependence is sometimes designated in terms of “sensitivity” or  “vulnerability.” Autarky —(self reliance) A policy of avoiding or minimizing trade and tying to  produce everything one needs (or the most vital things) by ones self Nontariff barriers —forms of restricting imports (other than tariffs) such as  quotes (ceilings on how many good of a certain kind can be produced) Protectionism —the protection of domestic industries against international  competition, by trade tariffs and other means Dependency Theory —A Marxist-oriented theory that explains the lack of capital  accumulation in the third world as a result of the interplay between domestic  class relations and the forces of foreign capital Collective good —tangible or intangible good, created by the members of a  group, that is available to all group members regardless of their indivudual  contributions WTO —ogranization begun in 1955 that expanded the GATT’s traditionsl focus on  manufactured goods, and created monitering and enforcement mechanisms. Most-favored nation concept —the priciple that one state, by granting another  state MFN status, promises to give it the same treatment given to the first states  most favored trading partner Cartel —an association of producers or consumers of a certain product, formed  for the purpose of manipulating its price on the world market Hard currency —money than can be redily converted to leading world currencies Floating exchange rates —the rates determined by global currency markets in  which private inverstors and government alike buy and sell currencies Fixed exchange rates —the official rates of exchange for currencies set by  governments; not a dominant mechanism in the international monetary system 
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since 1973 Managed floating exchange rate —a system of occasional multinational  government inventions in currency markets to manage otherwise free-floating  currency rates Central bank
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This note was uploaded on 04/08/2008 for the course POLI SCI 103 taught by Professor Pevehouse during the Spring '08 term at University of Wisconsin.

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pol sci terms test 3 - Mercantilism-an economic theory and...

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