5.1.2 Concepts and Terms

a lengthy conflict between the United States and the Soviet Union and their allies that included

• an arms race involving nuclear and conventional weapons and networks of military alliances
• economic warfare and trade embargoes
  
• propaganda andespionage
  
• space race
  
• proxy wars such as the Vietnam War (wars in which two nations do not fight directly, but they support military action in a third country)

the ability to produce a particular product at lower cost than another business or country

Comparative advantage means that no matter how good (or bad) the individual is at producing goods, he or she is always better at something than someone else is. Because the person can produce this one thing by giving up less than  others give up, he or she can sell it or trade it to others. The idea of comparative advantage is that people and nations can benefit from specialization and exchange.

conditions attached to a loan or debt relief, especially by the IMF or World Bank

These conditions are said to be necessary to ensure the country controls its economy to produce financial success and loan repayment. These may involve highly controversial conditions such as privatization of national assets or various austerity measures.

For example, in Nicaragua, Central America, the already low salaries of teachers and health care workers must be reduced before loans will be given to the country. (Source: International Financial Institutions in Latin America http://ifis.choike.org/)

the gap between those with access to digital technology and those without access

in industrial production, the idea that bigger is better

In many industries, as output increases, the average cost of each unit produced becomes lower. Fixed costs can be spread over more units. However, increasing industrial size can increase average costs (diseconomies of scale) because managing large operations is more difficult and more expensive.

a political and economic union of 28 member nations who work together for the good of the people of Europe, with standardized laws and common organizations. 18 of these countries share the same currency, the euro

a society in which the creation, distribution, and manipulation of information is important for economic and cultural development

the basic structures needed for the operation of a community, nation, or organization

In communities and countries, this includes roads, waterworks, communication services, sewage facilities, and facilities generating distributing electricity. It can include tools of information technology.

an economy in which knowledge is used to produce economic benefits

In today's interconnected world, knowledge is considered to be more critical than other economic resources, including natural resources and labour. This term is related to information society or a society in which the creation, distribution, and manipulation of information is important for economic and cultural development.

a legal agreement among Canada, Mexico, and the United States with the goal of increased trade and reduced barriers to trade among them

an organization not directly part of a government

More than 40 000 international NGOs operate throughout the world.

the relocation one function of a business to another country

For example, Ikea manufactures lamps at its factory in China.

Off-shoring differs from outsourcing because the operation is still managed by the corporation; in outsourcing, another firm is used to complete the task required.

a factory or place of harsh labour where working conditions violate human rights

Sweatshops exist in developing and developed countries, but most controversies are concerned with factories that are the result of outsourcing by transnational corporations. Here, workers work long hours in unsafe conditions for low pay.

legal agreements among two or more nations including various clauses about trade, taxes, and tariffs

Often, trade agreements cause problems because they lead to changes in the way things have always been done. They deepen interdependence with trade partners. Stronger nations tend to dominate weaker nations. An increase in "free trade" is a common goal.

the arrangement for people of one country to trade with people in other countries without any restrictions imposed from governments or other agencies

This can include

• international trade of goods and services without tariffs
  
• free movement of labour between countries
  
• free movement of capital between countries
  
• the absence of taxes, subsidies, regulations, or laws that give domestic companies advantage over foreign companies

a corporation with headquarters in one country and trade operations in many other countries

Typically, multinational corporations have branch plants (production facilities) in several countries. They do this to take advantage of reduced productions costs such as lower workers' salaries, lower taxes, and less restrictive labour laws and/or pollution controls.

an international organization that describes itself as a "global association of governments facilitating co-operation in international law, international security, economic development, and social equity"

The United Nations organization was founded in 1945 by 51 countries, and today includes 191 nations, almost every country in the world.