Exam 11: International Trade in the Global Marketplace

Correct Answer:

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(a) The presence of a global hegemon is desirable because it provides stability and order in the global trade system. Hegemons have the power and influence to enforce rules and norms, resolve conflicts, and provide public goods such as security and economic stability. They can also facilitate trade negotiations and provide a sense of predictability for other countries, which can lead to increased investment and economic growth. Additionally, hegemons can act as a lender of last resort, providing financial assistance to countries in need.

(b) When the hegemon is no longer willing or able to effectively carry out its role, it can lead to a number of problems in the global trade system. Without a dominant power to enforce rules and norms, there may be an increase in conflicts and disputes between countries. This can lead to a breakdown in trade agreements and a rise in protectionism, which can harm global economic growth. Additionally, without a hegemon to provide public goods such as security and economic stability, there may be increased uncertainty and volatility in the global economy. Finally, without a hegemon to act as a lender of last resort, countries in need may struggle to access financial assistance, leading to economic crises and instability. Overall, the absence of a global hegemon can lead to a more chaotic and unpredictable global trade system.