INTERNATIONAL MONETARY FUND

- Served as the bank of countries, lends money to needed countries

5 Marketing mechanism, exchange rates, share of merit and demerit

- Free float
- Managed float
- Target zone arrangement
- Fixed rate system
- Hybrid system

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GOLD STANDARD
- Money is based from the quantity of gold

Adavantages
- Price stability
- Reduced risk of exchange rates
- Handles trade imbalances

Disadvantages
- Limits the creation of money
- Volatility in the suppy of gold

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BRETTON WOODS SYSTEM
- To avoid WWIII and The Great Depression II

Causes of why the Bretton woods system ended

- Vietnam war cost
- Trading of dollars to gold
- Link between gold to dollar is severed
- The formation of the European Monetary System (EMS)

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FOREIGN TRADE
- Exchange of good between nations

Need of Foreign Trade

- Division of Labour and specialisation
- Optimum allocation and utilisation of resources
- Equality of prices
- Availabily of multiple choices
- Raises standard of living

7 Instrument of Trade policy

- Tariff
- Subsidies
- Import quotas
- Voluntary export restraint
- Local content requirements
- Antidumping policies
- Administrative policies

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INTERNATIONAL TRADE

Types of International trade

1. Bilateral Trade
- exchange of goods between two nations

2. Multi-lateral trade
= exchange of goods between three or more nations

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HISTORY OF THE WORLD TRADE ORGANIZATION

General Agreement on Tariff and trade (GATT)

- 1947, Geneva Switzerland, 23 members
- Part of the Bretton Woods system
- stable trade and economic world environment

Internation Trade Organization (ITO)

- Charter was not approved by US congress (written grant)

World Trade Organization (WTO)

- June 1 1995, replaced GATT

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Difference between WTO and GATT

GATT
- Multi-lateral Treaty
- concerned with Tariff Barriers in trade of goods
- Very weak disput settlement mechanism
- provisional
- contracting parties
- deals with trade in goods

WTO
- International Organization with membership
- No provisional app and no grandfather's right
- Non-Tariff Barriers
- Strong Dispute Settlement Mechanism
- Agreements are permanent
- has members
- deals with trade in services nad intellectual property

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UNILATERAL TRADE
- Only benefits one country
- tariff raises import prices to make local made products seem lower in comparison

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Regional Organizations

EUROPE: NATO, OSCE, EU, CIS

AMERICA: OAS, NAFTA, MERCOSUR, ANDEAN COMMUNITY, THE UNION OF SOUTH AMERICAN
NATIONS
ASIA: ASEAN, ASEAN+3, ARF, APEC, SCO, SAARC
AFRICA: AU, ECOWAS, SADC
MIDDLE EAST: ARAB LEAGUE, GCC

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LIBERAL DEMOCRACY
- Individual freedom
- limited government, popular sovereignty and plurality

Liberal
- open to new behavior or opinions and willing to discard traditional values
- supports social and political change

Democracy
- rule by the people
- voting

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NEOLIBERALISM
- Deregulates the economy
- destorys unions
- decreases taxes on rich and corporation
- defunds public goods
- favors big business and the wealthy
- Removes the protection of labor law
- Eliminates social services
- Police power
- Military force to repress opposition

Problem
- Exersice of political power affects the market economy

Effects
- The rich become richer while the poor become poorer

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HEGEMONY
- dominance of one country or social group over others.
- acceptance of domination by the less powerful group