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Most Favored Nation

trading status describes a condition in which a country grants other countries favorable trading treatment such as the reduction of import duties, ..., Status in an international trading arrangement whereby agreements between two nations on tariffs are then extended to other nations. Every nation involved in such an arrangement will have most-favored-nation status. This policy is used, particularly by the United States, to lower tariffs, extend cooperative trading agreements, and protect nations from discriminatory treatment. Most-favored-nation agreements can also be used to apply economic pressure on nations by deliberately excluding them from international trade.

John Maynard Keynes

English economist who advocated the use of government monetary and fiscal policy to maintain full employment without inflation (1883-1946), British economist who argued that for a nation to recovery fully from a depression, the govt had to spend money to encourage investment and consumption

Marshall Plan

Passed by Congress at President Truman and Secretary of State George G. Marshall's request in 1947; massive US assistance in European recovery through $17 billion in aid to Western Europe in order to relieve the economic devastation believed to spawn communism; during the plan, the region became a major center of American trade and investment, promoting prosperity for all involved nations;


an economic policy(1500-1800), that served the needs of the state, under which nations sought to increase their wealth and power by obtaining large amounts of gold and silver and by selling more goods than they bought, Zero sum Game, Colonies job was to provide natural resources to the factories of the home countries. Trading companies that owed their success to state chartered monopolies, with exclusive rights.


(1880s - 1910s) Implemented by Fredrick W. Taylor, scientific management to reduce waste, Reason over tradition. Efficiency. Piece rate systems. urged employers to reorganize the production process by subdividing tasks,

Third World

The region of the world containing a high concentration of underdeveloped or emergent countries, Also known as developing nations; nations outside the capitalist industrial nations of the first world and the industrialized communist nations of the second world; generally less economically powerful, but with varied economies.

Corn Laws

Enacted in 1815, these laws protected British agriculture by placing strict limits on the amount of foreign grain to be imported. They resulted in keeping basic food prices artificially high until their repeal in 1846.


1910-20s; principles for mass production based on assembly-line techniques, mass consumption based on higher wages, and sophisticated advertising techniques

Standard Oil

Standard Oil was a predominant integrated oil producing, transporting, REFINING, and marketing company. Established in 1870, it operated as a major company trust and was one of the world's first and largest multinational corporations until it was dissolved by the United States Supreme Court in 1911; John D. Rockefeller


protecting domestic manufacturers from foreign competition by imposing tariffs and quotas on imported goods


national self-sufficiency; no economic interaction with foreigners

As-is Agreement

No infringing on one another's market 1928

William Jennings Bryan

Politician who ran for president 1896, 1900 and 1908 under Democrats, was a pro-silverite and Populist leader


Political response to the great depression

Red Line Agreement

1928 agreement on Middle East oil supply, Line drawn around Arabia and Turkey. No prospecting without sharing labor and profits among the american, Britain, and french. the aim of the agreement was to formalize the corporate structure of TPC (Turkish Petroleum Company) and bind all partners to a self denial clause that prohibited any of its shareholders from independently seeking oil interests in the ex ottoman territory. it marked the creation of an oil monopoly, or carte, of immense influence, spanning a vast territory

Price-specie flow

compulsive wage and price restraint is central feature of gold standard. Nations that import too much must restrain domestic spending to compensate for loss of gold. Gold standard regulatory process. Idea that a nation should strive for a positive balance of trade. Argument by David Hume(1711-1776) against the Mercantilist idea that a nation should strive for a positive balance of trade, or net exports

Smoot-Hawley Tariff Act

legislation passed in 1930 by Hoover that established very high tariffs. its objective was to reduce imports and stimulate the domestic economy, but it resulted only in retaliatory tariffs by other nations, considered to have spread the Depression to Europe, Latin America, and Asia by destroying the ability of these regions to export goods to the U.S

Seven Sisters

Standard Oil of NJ (Exxon), Royal/Dutch Shell, British AngloPersian Oil Co (BP), Standard Oil of NY (Mobil), Texaco, Standard Oil of CA (Chevron), Gulf Oil. the seven major western oil companies of the twentieth century that until the 1970s controlled most of the production and distribution of middle east oil. In 1950 they had 99% of pipelines, 90% of production, 80% of known reserves, 75% of refining, and 66% of tankers.

John D. Rockefeller

an American industrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, Rockefeller founded the Standard Oil Company and ran it until he retired in the late 1890s. He kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first U.S. dollar billionaire, and is often regarded as the richest person in history

Comparitive advantage

Theory that shows that even if a country or entity has no absolute advantage in producing any good, it can still benefit by exporting the products by which it has the lowest opportunity cost of production. In the English-speaking world its ideas were criticized by Adam Smith with the publication of The Wealth of Nations in 1776 and later in 1817 David Ricardo with his explanation of comparative advantage. Also Corn Laws.

Import Substitution Industrialization (ISI)

An economic system aimed at building a country's industry by restricting foreign trade by erecting high tariff barriers against imports. It was especially popular in Latin American countries such as Mexico, Argentina, and Brazil in the mid-twentieth century. It proved successful for a time but could not keep up with technological advances in Europe and North America. (An economic theory employed by developing or emerging market nations that wish to increase their self-sufficiency and decrease their dependency on developed countries. Implementation of the theory focuses on protection and incubation of domestic infant industries so they may emerge to compete with imported goods and make the local economy more self-sufficient.)

Treaty of Versailles

The treaty imposed on Germany by France, Great Britain, the United States, and other Allied Powers in June 28th, 1919 World War I. The treaty made Germany pay war reparations of $30 billion dollars, limit its military and stripped it of its overseas colonies.

Bretton Woods

In July of 1944, US convened international conference of 44 nations in Bretton Woods, New Hampshire Resulted in the establishment of the IMF and the World Bank. Also an effort to stimulate international trade by stabilizing currency fluctuations between countries. The Key component was the relation of other nation's currencies to the US dollar, which was in turn backed by gold. When the dollar was devalued with respect to gold in 1971, the Bretton Woods system essentially ended.

Golden Gimmick

foreign tax credit for US oil companies; 1950s additional payments to the King were regarded as foreign income tax, the King's share would be deducted from the company's tax bill. It deprived the US treasury of $50M in taxes the very next year, enriching the King by the same amount; while production soared, so did the loss of taxes. For the State Department it provided foreign aid to a kingdom which was important strategically, without having to submit it to Congress.

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