Chapter 16- Achieving Economic Stability

Misery Index

Advantages and Disadvantages of International Trade

Globalization vs. Protectionism

Collectivization vs. Privatization

Nafta

European Union

Comparative Advantage

Advatages

Disadvantages

Globalization

Protectionism

Collectivization

also called the discomfort index

not an official government statistic

used during periods of high inflation and unemployment

Privatization

used when countries trade

opportunity cost is lower

only one country can have a comparative advantage in trade when trading with one other country

Tariff- a tax placed on imports to increase their price in the domestic market.

getting products from other countries that cannot be produced in your own country.

Quota- a limit placed on the quantities of a product that can be imported.

protectionist argue that a country could become independent through trade barriers

trade barriers protect growing industries from foreign competition

a country cannot obtain the benefits of the products of other countries if trade barriers aren't in place.

officialized in 1993

proposed by Bush and concluded by Clinton

benefits protectionists and free traders

Composed of 28 European States

political and economic union

covers 7.3% of world population

Used in the Soviet Union

many have control over production and distruction

few have control over production and distruction