Global Trade Concepts and Policies

The video explores the impact of globalization on the world economy, highlighting how global trade, comparative advantage, and government policies shape economic interactions. It discusses the complementary index and comparative advantage as key concepts in trade, and examines the role of neoliberalism and global organizations like the WTO and IMF. The video also addresses challenges such as income inequality and economic crises, emphasizing the interconnectedness of global economies.

What is one of the main effects of globalization on the global economy?

• Equal distribution of economic benefits

• Reduction in capital investments

• Increased consumer choices

• Decreased competition in markets

Why do countries engage in global trade?

• To avoid political relationships

• To reduce efficiency

• To access natural resources they lack

• To increase isolation

What does a higher complementary trade index score indicate?

• No trade relationship

• A more favorable trade relationship

• A perfect match of exports and imports

• A less favorable trade relationship

What is the concept of comparative advantage?

• Avoiding specialization

• Having a lower opportunity cost in producing a good

• Producing all goods domestically

• Trading only with geographically close countries

How does specialization benefit countries in global trade?

• It reduces efficiency

• It allows countries to be more efficient

• It increases production costs

• It makes countries less productive

What is the purpose of tariffs in trade policy?

• To eliminate trade deficits

• To encourage domestic production

• To make imported goods cheaper

• To promote foreign goods

What is neoliberalism characterized by?

• Reduction of private trade

• Promotion of free market capitalism

• Focus on public ownership

• Increased government intervention

What is the main goal of the World Trade Organization?

• To focus on regional trade only

• To promote free trade and reduce trade obstacles

• To restrict international trade

• To increase tariffs globally

Which organization aims to coordinate petroleum policies among member countries?

• European Union

• World Bank

• OPEC

• NAFTA

What is a potential negative impact of neoliberal policies?

• Prioritization of wealthier states over developing regions

• Decreased economic inequality

• Increased government oversight

• Enhanced accountability in markets