International Relations Q&a

Suppose your state had a chance to reach a major trade agreement by making substantial concessions. The agreement would produce $5 billion in new wealth for your state, as well as $10 billion foreach of the other states involved (which are political allies but economic rivals). What advice would a mercantilist give your state's leader about making such a deal? What arguments would support theadvice? How would liberal advice and arguments differ?

According to mercantilism, what maters is not so much a state’s absolute amount of well being as its position relative to rival states. Keepingthis in mind, a mercantilist will probably advice my state not to do the agreement because I won’t gain as much as the other sates will and in addition, I will be giving advantage to other statesbecause they can transform that wealth into military power.

On the other hand, a liberalist would advice me to do the agreement because even though the other states are gaining much more, I will begaining too.

How did the Special Drawing Right come to replace gold as the closest thing to a world currency? What are the similarities and differences between that new system and the old one?

In1971, the SDR was created by the IMF to replace gold. The SDR is called “paper gold” because it is created in limited amounts by the IMF and is owned only by states (central banks).

“Paper gold” canbe used to buy a large amount of currencies but not to buy goods.

If you were representing an MNC such as Toyota in negotiations over building an automobile factory in a foreign country, whatkinds of concessions would you ask the host government for? What would you offer as incentives? In your report to Toyota's top management regarding the deal, which points would you emphasize as mostimportant? If instead you were representing the host state in the negotiations and reporting to top state leaders, what would be your negotiating goals and the focus of your report?

If I were...