POLI SCI 103 Study Guide - Midterm Guide: Peace Corps, Dependency Theory, Political Corruption
30 Oct 2014
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Around million a year (10 times global military spending) Specialization- (adam smith) greater efficiency, cannot create the full product of a car or cell phone, divided into different parts. Gains from trade- (david ricardo) some countries are good at making some products, specialize and trade them. Sanctions: gov"t creates sanctions against economic interactions between certain states. Autarky: absence of trade, consumption=production, economies produce and consume the exact same bundle of good, not efficient, to avoid becoming dependent on other states (albania: protectionism (ex. Balance of trade: value of states imports relative to its exports (surplus/deficit) Adjustment costs: when workers have to shift industry they may have to 1. National security: should you specialize in comparative advantage and trade for weaponry/steel etc. International bargaining: states bargain over trade barriers/market access, there is a surplus because of specialization, can breakdown into a trade war (ex. 1963 us-eec chicken war didn"t was us chicken)
