Chapter 16

Misery Index

the sum of the monthly inflation and unemployment rates. The index helps determine how the average citizen is doing economically and it is calculated by adding the seasonally adjusted unemployment rate to the annual inflation rate

Example: in February of 2008 in the UK he misery index was low

International Trade

Advantages

Disadvantages

Globalization v Protectionism

-Enhances the domestic competitiveness
-Takes advantage of
-international trade technology
-Increase sales and profits
-Extend sales potential of the existing products
-Maintain cost competitiveness in your domestic market

-Exploitation of importing country
-Countries export harmful products to other countries
-Domestic turbulence
-Unemployment and local small manufacturers going out of business

Collectivization v Privatization

(Globalization) Free Trade: international trade left to its natural course without tariffs, quotas, or other restrictions.

Protectionism: is the economic policy of restraining trade between states/countries through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations.

Collectivization

Privatization

the transfer of ownership, property or business from the government to the private sector

a theory advocating collective control especially over production and distribution

NAFTA

The North American Free Trade Agreement is a regulation implemented January 1, 1994 in Mexico, Canada and the United States to eliminate most tariffs on trade between these nations.

European Union

s a political and economic union of 28 member states that are located primarily in Europe.
The EU has developed an internal single market through a standardized system of laws that apply in all member states.

Comparative Advantages

the ability of an individual or group to carry out a particular economic activity more efficiently than another activity.