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York University
Social Science
SOSC 1520

SOSC 1520 9.0 Full Exam Study Guide Exam Terms Bretton Woods System: Established in 1944 and named after the New Hampshire town where the agreements were drawn up, the Bretton Woods system created an international basis for exchanging one currency for another. It also led to the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development, now known as the World Bank. The former was designed to monitor exchange rates and lend reserve currencies to nations with trade deficits, the latter to provide underdeveloped nations with needed capital. The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate by tying its currency to the U.S. dollar. The logic behind these international economic systems was twofold: first, to create stable and harmonized international regimes dealing with a host of issues from trade to communications; second, to knock down those major barriers between countries that impeded or prevented interactions or communications. The rise of globalization and technologically advancement brought about these economic systems. It was a system created to try to rebuild the international economic system that was damaged by World War II. Just-in-Time Employment: The goal of a just-in-time labor force is to allow firms to increase the number of hours (and workers) when demand rises and to reduce hours when demand falls. In practice, this means more temporary and part-time work, as well as more independent contracting to the self-employed. Some workers also seek weaker ties to the company, and would rather want contract work done and to the freedom to contract with multiple companies. This new form of employment produces two main results: first, individuals or firms that are not able to operate in such flexible networks are phased out; and second, the flexibility of work induces the individualization of work tasks and the increasing differentiating of workers creating an extraordinary range of variation in working conditions. The individualization of work, is indicative of Adam Smith’s the division and labor and specialization. Trade Barriers: Trade barriers are government-induced restrictions on international trade. Most trade barriers work on the same principle: the imposition of some sort of cost on trade that raises the price of the traded products. If two or more nations repeatedly use trade barriers against each other, then a trade war results. Trade barriers can take many forms, such as: tariffs, subsidies, and import quotas. In theory, free trade involves the removal of all such barriers, except perhaps those considered necessary for health or national security. In practice, however, even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel. Trade barriers are criticized as they go against the Adam Smith free trade theory, and many policies have been implemented to rid trade barriers; an example is the North American Free Trade Agreement (NAFTA), which was an agreement between Canada, US, and Mexico to eliminate trade barriers between these countries. Sustainable Development: Sustainable development refers to a mode of human development in which resource use aims to meet human needs while preserving the environment so that these needs can be met not only in the present, but also for generations to come. Sustainable development ties together concern for the carrying capacity of natural systems with the social challenges faced by humanity. Sustainability is related to the rights approach and it argues that we should sustain the opportunities of the next generation so that their freedoms are no less than ours are. Nicholas Stern talked about a linked idea of sustainability which concerns stewardship as well, which is the concept that we have a duty to preserve key aspects of our planet, such as the environment and other species for our descendants and future generations to understand and appreciate. Public vs. Private sphere: Traditionally, there have been two spheres recognized: public and private. The public sphere covers our public interactions, education, business, government, community interactions. The private sphere belongs to the individual and the family. The private sphere is a certain sector of societal life in which an individual enjoys a degree of authority, unhampered by interventions from governmental or other institutions. The public sphere is an area in social life where individuals can come together to freely discuss and identify societal problems, and through that discussion influence political action. Structural Adjustment Policies: Structural adjustments are the policies implemented by the International Monetary Fund (IMF) and the World Bank (the Bretton Woods Institutions) in developing countries. These policy changes are conditions for getting new loans from the International Monetary Fund (IMF) or World Bank, or for obtaining lower interest rates on existing loans. Conditionalities are implemented to ensure that the money lent will be spent in accordance with the overall goals of the loan. Through conditionalities, Structural Adjustment Programs generally implement "free market" programs and policy which is a Smithsonian way of economics which advocates for no government intervention, and policy regulation. These programs include internal changes, notably privatization (the process of transferring ownership of a business, enterprise, agency, public service or public property from the public sector (a government) to the private sector) and deregulation (Deregulation is the act or process of removing or reducing state regulations. It is therefore opposite of regulation, which refers to the process of the government regulating certain activities), as well as external ones, especially the reduction of trade barriers. Countries that fail to enact these programs may be subject to severe fiscal discipline. Critics argue that financial threats to poor countries amount to blackmail; that poor nations have no choice but to comply. Devaluation of the bowers currency may also be implemented, which in modern monetary policy is a reduction in the value of a currency with respect to those goods, services or other monetary units with which that currency can be exchanged FDI: Foreign direct investment (FDI) is a direct investment into production or business in a country by a company in another country, either by buying a company in the target country or by expanding operations of an existing business in that country. Entities making direct investments typically have a significant degree of influence and control over the company into which the investment is made. Open economies with skilled workforces and good growth prospects tend to attract larger amounts of foreign direct investment than closed, highly regulated economies. FDI has then tended to advocate free market economies and deregulated capitalistic growth since it offers the most amounts of Foreign Direct Investments. FDI has a positive effect on economic growth than short-term investment promotes growth. Countries can learn from the countries investing within them, in areas such as technology. An example of foreign direct investment would be an American company taking a majority stake in a company in China. Another example would be a Canadian company setting up a joint venture to develop a mineral deposit in Chile. Copy Cat Nation: Countries that have low patent right systems and copy the technology of other nations. A copycat nation is any nation or economy that merely copies the growth and production products of another country and lacks any form of innovation on its part. America is an innovative economy, while China is merely a copycat nation mimicking the products and intellectual property of America. Whenever we think of copycat nation, we think of China, since copycatting is well known in the Chinese economy. China shakes the World spoke about copycatting in the forms of intellectual property such as I.D’s and identity theft and creation of new identities for a small cost. One of the biggest popularities of copycatting in China was of cell phones from popular brands such as Nokia, Samsung, and Apple. Copycat phones were made to imitate these brands, but were designed with little research and development allowing them to be sold for the fraction of the cost. In a nation with such breakneck economic growth and an overburdened judicial system, the dishonest frequently win. The system to protect the honest simply is not robust enough. Dishonest copiers move quickly to secure an advantage in a rapidly growing market, and their success, in turn, perpetuates China’s copycat culture. In other words, dishonesty wins in China, and it might very well be the country's undoing. The fear of intellectual property theft erodes trust and cooperation; this seems to be one big reason China is stagnant when it comes to innovation. Feminization of Poverty: Feminization of poverty describes a phenomenon in which women represent disproportionate percentages of the world’s poor. This concept is not only a consequence of lack of income, but is also the result of the deprivation of capabilities and gender biases present in both societies and governments. This includes the poverty of choices and opportunities, such as the ability to lead a long, healthy, and creative life, and enjoy basic rights like freedom, respect, and dignity. As stated above, the poverty is not only from a lack of income, many migrant women who entered as family-class immigrants were denied access to various opportunities, such as taking English in a public school or participating in skills- upgrading programmes sponsored by the federal government as stated in the impacts that the NAFTA agreement had on women. These privileges were reserved for the independent applicants (men), supposedly the household heads. Having a lack of education and skills upgrading kept women low in the labor industry, this maintained their poverty status. The NAFTA agreement also had a severe impact on the worker positions of women, by depressing labor conditions in companies by the removal of full-time positions and contracting work outside the company. Women were the ones that lost the full-time positions disproportionately then men did. Shock Therapy: In economics, shock therapy refers to the sudden release of price and currency controls, withdrawal of state subsidies, and immediate trade liberalization within a country, usually also including large scale privatization of previously public owned assets. An example of a country that used shock therapy was Russia, since the old economic system came to a complete halt, and the market demanded an intense transformation of the economy, which went by the name of shock therapy. The complexity of this transformation was heightened by the nature of a militarized economy, which largely conditioned the structure of society and the positioning of political
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