APEX Econ 6.2: International Organizations – Flashcards
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What does the international banking system consist of?
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A decentralized set of central and private banks
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Why do central banks play an important role in the international banking system?
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They control a country's foreign exchange reserves and set its monetary policies
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How do central banks impact the global economy?
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They influence the national money supply which affects the volume of international trade
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What does greater capital mobility mean?
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Investment money flows freely around the world
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Which of these results from greater capital mobility?
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Increased foreign investment
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Greater capital mobility can help developing countries by providing what?
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Increased foreign investment
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What does the giving of foreign aid involve?
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A gift of money from one government to another government
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Foreign aid is intended to result in what?
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Development
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What is one purpose of foreign aid?
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To alleviate poverty or suffering
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Match each of the international organizations below with its main mission. A. Bank for International Settlements (BIS) B. International Monetary Fund (IMF) C. World Bank D. World Trade Organization (WTO)
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A. To promote monetary stability and bank uniformity B. To prevent major disturbances of the economic system C. To provide loans to reduce poverty and stimulate development D. To reduce trade barriers and promote free trade
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Match each of the international organizations below with one of its functions. A. Bank for International Settlements (BIS) B. International Monetary Fund (IMF) C. World Bank D. World Trade Organization (WTO)
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A. Coordinates banking regulations in various countries B. Gives advice and technical assistance C. Provides development loans D. Provides a forum for negotiating multilateral trade agreements
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Match each of the international organizations below with one of its functions. A. Bank for International Settlements (BIS) B. International Monetary Fund (IMF) C. World Bank D. World Trade Organization (WTO)
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A. Gives short-term emergency loans to member banks B. Gathers economic information to help make economic policy recommendations C. Provides loans to promote sustainable development D. Helps resolve trade disputes
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How does the IMF use its loans to attempt to control and fix the economies of countries that need its help?
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By improving conditionality
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Why does the IMF require countries to accept economic policy recommendations along with the loans it gives?
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The IMF wants to fix the economies of countries that need its help
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What does conditionality require of countries getting loans from the IMF?
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The acceptance of economic policy recommendations
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What is the purpose of the loans made by the World Bank?
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To promote sustainable development
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What kind of loans does the World Bank make?
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Long-term loans with low or no interest
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What is one effect of World Bank loans to developing countries?
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Improved climate for foreign investment
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Most trade agreements made among members of the WTO must be agreed upon by what?
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A consensus
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The WTO does all of the following except what?
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Enforce banking regulations
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The WTO attempts to promote free trade around the world so that what happens?
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Trade flows smoothly and predictably
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What is the main intention of boycotts?
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To get countries or companies to stop doing something objectionable
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What is the purpose of a boycott?
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Punish unfair practices
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Why would a boycott work on a country?
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The country would face economic pressure because of reduced trade or growth
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How can a country respond to a trade embargo?
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By seeking other trading partners
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What might happen to a country that has a trade embargo placed on it?
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It becomes more self-sufficient
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How might a country respond to a trade embargo?
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It could pursue a policy of national self-sufficiency
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Match each of the economic sanctions below with an example of its use. A. Boycott B. Embargo C. Trade sanction
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A. Consumers refuse to buy goods from companies that use child labor B. The U.S. government prevents U.S. businesses from trading with Iranian businesses C. The European Union imposes a high tariff on agricultural products imported from the United States
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Match each of the economic sanctions below with its definition. A. Boycott B. Embargo C. Trade sanction
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A. Refusal to trade with a company or country B. Restriction on all trade with a particular country C. Policy restricting imports or exports
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Match each of the economic sanctions below with an example of its use. A. Boycott B. Embargo C. Trade sanction
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A. A country refuses to send its athletes to an Olympic Games hosted by another country B. The European Union forbids European citizens from doing business with a tyrannical government C. India imposes a 100% tariff on cars coming from Japan and the United States
