Ch. 7: The Foreign Sector Pt. II

When was the GATT renamed as WTO?
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Who formed a common market in 1992?European UnionWhat did the European Union introduce in 2002?a common currency, the euroWhen was Mercosur created?1992Who are the 5 members of Mercosur?i. Brazil ii. Argentina iii. Uruguay iv. Paraguay v. VenezuelaWho are the 5 associated members of Mercosur?i. Equator ii. Bolivia iii. Colombia iv. Peru v. ChileASEANAssociation of South East Asian NationsWhen was ASEAN created?2010What are the five sources of Comparative Advantage?1. Endowment of natural resources 2. Economies of Scale 3. Technological advancement and product cycle 4. Technological advancement and product cycle 5. Government policiesWho does the US have its largest trade deficit with?ChinaWhen does the US have a negative trade balance?when its imports exceed its exportsNegative trade balancetrade deficitPositive trade balancetrade surplusWhen does the US have a positive trade balance?When its exports exceed its importsWhat are the six factors that cause so much growth in world trade?1. Lower costs of transportation, insurance, and freight 2. The growing speed of communication 3. Role of GATT and WTO 4. World incomes 5. Productivity gains in tradable sector 6. Unilateral liberalization of trade by developing countriesSince this was created there has been a significant sure in world trade.GATTWhat are the three ways a free trade agreement can help increase the national income?1. By increasing the nation's exports 2. By Protecting US investment in foreign countries 3. By protecting US intellectual property rightsThis is an agreement between two or more countries on certain behaviors that affect trade in goods and services.Free TradeWhat are the two categories that Trade agreements can fall into?1. Bilateral trade agreements 2. Multilateral trade agreementsSteps that government take to restrict imports and encourage exports for various reasons.Government Trade InterventionWhat are the four reasons that government intervenes with international trade?1. To protect domestic firms or workers 2. Political considerations 3. Diplomatic considerations 4. Strategic trade policy