Economics and The Social Sciences: Department of Economics and Finance Northern Kentucky University

Economics and the Social Sciences
by Gary E. Clayton, Ph.D.

Department of Economics and Finance
Northern Kentucky University
Economists take pride in their long and distinguished history in the social sciences.
Contributions to the discipline date back to Aristotle, and the word economy is even derived
from the Greek oikonomia, which refers to house or household (oikos) and to manage or
management (nemein). Less well known, however, is the extent to which the discipline of economics is integrated with the other social sciences.
Historians and economists, for example, both share a strong sense of how the past shapes
the present. Who else would so thoroughly understand the impact of President Jacksons bank
war in the 1830s on the structure of the modern Federal Reserve System? Nearly 80 years after
the confrontation, when Congress established the Federal Reserve System in 1913, a regional
structure was created to prevent the ascendance of another Nicholas Biddle with the economic
power to challenge the President directly.
Psychologists and sociologists likewise share a common bond with economists. To illustrate,
one of our preeminent economists, Dr. Gary S. Becker, Professor in the Departments of
Economics and Sociology at the University of Chicago, won the 1992 Nobel Prize in economics
for his applications of economic analysis to social problems. His writings readily acknowledge
the interaction of psychological, sociological, and economic forces on subjects such as the origins and control of crime and substance abuse.
Geographers and economists also share a common interest in the nature and distribution of
resources. These resourceswhich economists like to call landare the gifts of nature that
are so essential to economic growth and development. The overlap between these two disciplines is now so extensive that a whole new field of studyeconomic geographyhas
emerged.
Civics and government also share a number of interests with economics that cannot be overlooked. For example, political scientists know that any analysis of a modern presidential election would be incomplete without a discussion of the economys health. Likewise, economists
know that it is virtually impossible to discuss the rationale of tax or budget legislation without
first taking into account the political climate of the times.
At the highest level of abstraction, economics has evolved to the point where it has become a
generalized theory of choice. At the more applied level, the study of economics is the study of
how we make decisions in a world of scarcity. According to Kenneth Boulding, one of the
major economists of our time, economics is significant not merely because it investigates an
important slice of life in the marketplace, but because the phenomena which emerge . . . in the
marketplace are also found in virtually all other human activities. And how, might we ask,
could we ever have a full understanding of this study of how we make decisions if we failed to
take advantage of the contributions made by all the social sciences?
CURRENT
EVENTS
UPDATE
SPRING 1998
Visit Glencoes on-line

Current Events Update
with additional resource links
through our World Wide Web
site www.glencoe.com/
sec/socialstudies
Contributing Writer: Barbara S. Karni
Contents
SPECIAL REPORT: WORLD STOCK MARKET
SHAKE-UP . . . . . . . . . . . 13
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Sociology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Asia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911
Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1213
Middle East . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1516
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
International . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1920
Surfing the Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2223
Map of Latin America and the Caribbean and Fact Sheets . . . . . . . . . . . . . . . 2428
Answer Key . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2931
GLENCOE
McGraw-Hill
New York, New York
Columbus, Ohio
Woodland Hills, California
Peoria, Illinois
Use the Spring 1998 Current Events Update with the following Glencoe texts.
United States History
The American Journey
American History: The Early Years To 1877
American History: The Modern Era Since 1865
American Odyssey: The United States in the 20th Century
History of a Free Nation
America Is
Government and Civics
United States Government: Democracy in Action
American Government: Principles and Practices
Civics: Responsibilities and Citizenship
Civics: Citizens in Action
Economics
Applying Economic Principles
Economics: Principles and Practices
Economics Today and Tomorrow
Geography
Glencoe World Geography
Geography: The World and Its People
World History
World History: The Human Experience
Human Heritage: A World History
World Cultures
Global Insights: People and Cultures
The Human Expression: World Regions and Cultures
Glencoe/McGraw-Hill
Copyright 1998 by The McGraw-Hill Companies, Inc. All rights reserved. Permission is granted to reproduce
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1 2 3 4 5 6 7 8 9 066 02 01 00 99 98
SPECIAL REPORT: WORLD STOCK

MARKET SHAKE-UP
Stock Markets Around the World Tumble
Copyright by The McGraw-Hill Companies, Inc.
Stock markets from New York to Tokyo tumbled

late last year, in the worst stock market crisis in a
decade. Prices on the Hong Kong stock market fell 30
percent in four days, and other stock market indexes
in Asia lost as much as half of their value. Smaller
stock markets, including those in Tel Aviv, Mexico
City, Moscow, and So Paolo, were particularly hard
hit, with double-digit losses. In New York, London,
Tokyo, and Paris prices declined 813 percent.
Traders around the world watched the markets with
panic and fear, according to one securities trader.
The declines were triggered by economic conditions in Asia. Last July Thailand devalued its currency, reducing the number of bahts exchanged per
unit of foreign currency. The devaluation caused the
Thai stock market to plummet. The Philippines,
Malaysia, and Indonesia soon followed suit, setting
off a chain reaction throughout the rest of the world
(see below). All four countries had racked up large
deficits, which made it impossible to maintain the
value of their currencies. As a result, the countries
were forced to devalue.
In October the Hong Kong stock market began to
show serious signs of weakness, as investors began to
worry about the stability of the yuan.
July 2:
Thailands
currency, the
baht, falls to its
lowest level in
11 years.
GLENCOE
July: The
Philippines lets
its currency
depreciate.
July: Malaysia July and

lets its currency August:
depreciate.
Monetary
problems hit
Indonesia.
Hong Kongs currency has long been pegged to

the U.S. dollar, meaning that the rate at which dollars
could be exchanged for yuan varied only within a
narrow band. Worried that China would not be able
to maintain the peg as other Asian countries devalued
their currencies, investors sold Chinese currency. The
effect was a stock market crash that pushed prices on
the Hang Seng index down from 16,000 points last
summer to 9,000 points last October. The declines
were the worst in Hong Kong since the 1980s.
The drop in the Hong Kong stock market need not
have affected markets in the United States, according
to experts, who believe the impact was merely psychological. Fundamental conditions in the United
States remain solid, with strong growth, modest inflation, and a declining budget deficit. But the crisis in
Asia seemed to make investors feel uncertain, causing
the New York Stock Exchange to plunge in October
(see page 2).
Questions
1. What chain of events caused stock markets throughout the world to decline last year?
2. How far did stock market prices fall?
October: The
Hong Kong
stock market
crashes, losing
almost 30
percent of its
value.
October: The
New York Stock
Exchange
loses more
than 7 percent
of its value in a
single day, the
largest drop
since 1987.
October:
Markets in
Latin America
collapse.
October:
Markets in
Europe suffer
their worst
decline in 10
years.
CURRENT EVENTS UPDATE

MARKET SHAKE-UP
Markets Rebound Quickly

in United States
The Dow Jones industrial average of blue-chip
(high-quality) stocks fell by more than 7 percent in a
single day last October, falling 554 points to 7,161. In
percentage terms, the decline represented the twelfthlargest drop in the history of the Dow; in absolute
terms, the decline was the largest one-day decline
ever. Other market indexes, including the S&P 500
and the NASDAQ, also fell sharply (see below).
Although many investors feared the market would
continue to fall, it rebounded almost immediately,
rising 337 points October 28, the day after the plunge.
By the end of November the market had rebounded
to more than 7,800, and it passed the 8,000 mark in
December.
The declines in the market were set off by the col-
lapse of stock markets in Asia, which caused stock

markets around the world to tumble (see pages 1 and
3). The crisis in Asia will continue to hurt the United
States economy since the devaluation of Asian countries currencies will make exports by the United
States more expensive, reducing sales of companies
that sell goods in Asia.
Questions
1. What happened to the price of an average share on
the New York Stock Exchange in the last three
months of 1997?
2. What set off the changes in the market last
October?
Standard and Poors 500 Stock Index

990
970
950
930
910
890
850
20
27
Sept.
4
Oct.
11
18
25
15
22
Nov.
29
6
Dec.
Fed Chairman Sees Silver Lining

to Stock Market Decline
Alan Greenspan, the chairman of the Federal
Reserve Board, told Congress that the large declines
in the United States stock market that took place last
fall could actually help the economy by reducing the
risks of rising inflation.
Greenspan has often warned that the economy is
becoming overheated and that interest rates might
have to increase to cool off the economy. As chairman of the Federal Reserve Board, Greenspan is
2
responsible for raising and lowering interest rates in

order to maintain a strong economy.
Questions
1. Why does Chairman Greenspan believe that the
plunge in the stock market crash might be good for
the United States economy?
2. Why is he concerned about interest rates?
GLENCOE
870

MARKET SHAKE-UP
Currencies Depreciate
Across Southeast Asia
Indonesia
Rupiah
Malaysia
Ringgit
Phillippines Singapore
Peso
Dollar
100%
90%
91%
80%
78%
70%
77%
Oct.
Aug.
Oct.
June
Aug.
Oct.
June
Aug.
Oct.
June
67%
63%
Oct.
50%
Aug.
60%
June
1. What happened to currencies in S.E. Asia last year?

2. Which countrys currency lost the most value?
110%
Thailand
Baht
Aug.
Questions
Decline in Currencies
Value of currencies in dollars as a percentage of their value
on July 1, 1997
June
Southeast Asian currencies plummeted in value

last year, losing as much as 91 percent of their value
within a three-month period (see opposite). The
depreciation of the currencies continued throughout
1997, with the Indonesian rupiah and the Thai baht
reaching record lows last December. Theres a continued panic for dollars, said one currency trader,
citing uncertainty over the economic stability of the
region as the central reason for the drop in the value
of the regions currencies.
South Korea and Indonesia Receive

International Economic Aid
International lending associations agreed to provide massive financial assistance to South Korea and
Indonesia last fall. Aid to both countries was provided in order to avert financial crises that could
have consequences through the region.
South Korea received $57 billion in aid from the
International Monetary Fund (IMF), the World
Bank, the United States, and Japan. The bailout to
the worlds eleventh-largest country will help Korea

pay its foreign debts and restructure its finance
sector.
Indonesia will receive $15 billion in emergency
loans from the International Monetary Fund (IMF).
In addition, it will be able to draw on $3 billion in aid
from the United States, which will be provided only
if the IMF assistance proves inadequate.
Prime Minister Resigns in Thailand

After Failing to Manage Economy
Chavalilt Yongchaiyudh, the Prime Minister of
Thailand, resigned last November, leaving a political
and economic vacuum in the country, as rival groups
jockeyed for power. He had been widely blamed for
failing to manage the Thai economy, which led to the
economic and financial crisis that came to a head
there last summer. That crisis set off a chain of events
that caused stock markets around the world to plummet last fall.
The effect of the economic crisis has been severe in
GLENCOE
Thailand. Poor people are reportedly taking their children out of school so that they can send them to
work; rich people are reportedly selling off assets.
Questions
1. Why did the Prime Minister of Thailand resign?
2. What has been the effect in Thailand of mismanagement of the economy?
UNITED STATES
Campaign Finance Defeated by Senate

to reform the campaign finance
laws.
Many Republican leaders called
for the appointment of a special
prosecutor to investigate the allegations of wrongdoing by the
President and Vice-President. At
issue is whether Clinton and Gore
violated the law when they telephoned donors from the White
House. In December, AttorneyGeneral Janet Reno announced that
she would not appoint a special
prosecutor in the case, but would

instead continue to have Justice
Department attorneys investigate
the case. Her decision pleased the
Administration and outraged
many Republicans.
Questions
1. What was the main provision of
the defeated bill?
2. What controversy spurred drafting of the bill?
Top Donors in 1996

Total*
Company
Phillip Morris
(In millions)
Percent to
Democrats
Percent to
Republicans
$4.2
21
79
American Federation of State,

County and Municipal Employees
4.0
99
Association of Trial Lawyers

of America
3.5
85
14
National Education Association
3.3
96
Teamsters Union
3.2
96
Laborers Union
3.1
93
United Auto Workers
3.0
99
United Food and Commercial

Workers
2.9
99
International Brotherhood of
Electrical Workers
2.8
98
American Medical Association
2.8
23
77
*Includes contributions to candidates and to political parties in the 199596 election cycle by
organizations, their affiliates, their PACs, employees, and members of their immediate families.
Health Care Coverage of Children Expanded

About 5 million children will now receive free or
low-cost health care as a result of an expansion of
health care coverage by the states that began last fall.
The move, which will insure about half of the
countrys 10 million uninsured children, represents the
largest expansion of government health insurance
since Medicaid was established in 1965.
Under the new plan, states will provide health insurance to poor families through health maintenance
organizations (HMOs). The poorest families will
receive free medical care, while better-off families will
pay modest fees.
Expansion of health care coverage was motivated
4
by the change in the welfare law, under which welfare

benefits, including federally funded medical insurance, will be terminated for millions of people. Many
former welfare recipients will work in jobs that do not
offer company-paid medical insurance and will no
longer have access to medical care.
Questions
1. How many children will benefit from the expansion of health insurance?
2. What caused this health care move?
GLENCOE
Senate Republicans voted down

a bill last fall that would have reformed campaign finance practices.
The bill, sponsored by Arizona Republican Sen. John McCain and
Wisconsin Democrat Sen. Russell
Feingold, was drafted in the wake
of the continuing scandal over campaign finance that has plagued the
White House since 1996. President
Clinton and Vice President Gore
have been accused of unlawfully
soliciting contributions from the
White House and using soft
money contributions to finance
the campaigns of Democratic candidates.
The bill would have banned
soft money contributions, or contributions made to political parties
rather than to particular candidates. Such contributions are unregulated, and there is no limit to
the amount that can be donated.
Earlier in the year, Sen. Fred
Thompson, a Republican from Tennessee, chaired hearings into the
campaign finance scandal at the
White House. The hearings focused
national attention on the problem,
but ultimately no action was taken
UNITED STATES
Reform of IRS Supported

The White House and leaders in the House of
Representatives have agreed to overhaul the Internal
Revenue Service (IRS), the federal agency responsible
for assessing and collecting taxes. The Senate is
expected to approve the proposed bill early this year.
The proposed reformsthe first major changes to
the agency in 45 yearswould create an outside board
to oversee the agency and ensure that the rights of taxpayers are protected. The legislation also mandates creation of a new taxpayer bill of rights, which will
make it easier for taxpayers to sue the IRS for damages.
Reform was proposed following Senate hearings

last fall in which taxpayers testified about abuses by
the agency. During those hearings, the head of the
IRS acknowledged that excesses had taken place and
apologized to the Senate committee.
Questions
1. What will the proposed law do to protect taxpayers against abuses by the IRS?
2. What prompted passage of the law?
Unemployment Drops to Lowest Level in Decades

Unemployment in the United
States fell to 4.6 percent in 1997, the
lowest level in 24 years. Average
hourly earnings rose to $12.47 last
November, an increase of 4.1 per-
cent over the previous 12 months.

The rate of increase was twice the
rate of inflation, indicating that
wages rose in real terms.
The rate of unemployment in
Shrinking Unemployment
11%
10.8%
November was 3.8 percent among

whites, 6.9 percent among Hispanics, and 9.6 percent among blacks.
The rate among women was 4.0
percent. In a further sign of economic prosperity, the percentage of
people working reached an all-time
high of 64 percent.
10%
Questions
9%
8%
7%
6%
5%
1973
4.6%
75
4.6%
77
79
81
83
85
87
89
91
93
95
97
1. What was the rate of unemployment in the United States last

November?
2. How does this figure compare to
historical rates?
Census Data Show Rising Income

Economic prospects for almost
all Americans have risen since
1994, and gains by minorities have
been particularly impressive, according to new United States Census figures. Median household income rose for the second year in a
row in 1996, reaching $35,392, an
increase of 1.2 percent.
Although income rose, the gap
between rich and poor grew in
1996. Incomes rose fastest among
the wealthiest 20 percent of the
population, while incomes of the
GLENCOE
poorest 20 percent of the population declined by 1.8 percent. The

number of people living in poverty
rose by 500,000.
Despite the drop in incomes of
the poorest Americans, incomes of
minorities rose. The number of African Americans living below the
poverty level fell to 28.4 percent, the
lowest level since 1955, when data
were first analyzed. The gap between earnings of African American
men and non-Hispanic white men
also narrowed, reaching its lowest
level in 30 years. The median income of Hispanic households rose

by 5.8 percent, the largest increase
of any group in 1996. The figure had
fallen by 5.1 percent in 1995.
Questions
1. What happened to median income in the United States in
1996?
2. What happened to the number
of people living in poverty?
UNITED STATES
Elections Maintain Status Quo

The status quo was left largely
intact following elections last November. Republican Governor
Christie Todd Whitman was
elected to a second term in New
Jersey, and former State Attorney
General James S. Gilmore III, a Republican, was elected Governor of
Virginia. The mayors of Boston,
Detroit, Cleveland, Minneapolis,
New York, Pittsburgh, and St. Paul
were all reelected (with the mayor
of Boston running unopposed). In
Houston Lee P. Brown, the former
New York City Police Commissioner and federal drug czar, be-
came the first African-American

mayor to be elected in the southeast Texas city.
Several important initiatives
were on the ballot around the country. In Washington State voters
rejected a proposal that would have
required safety tests for handgun
owners and trigger locks on handguns. Voters in Minneapolis and
Pittsburgh rejected referenda on
construction spending for sports
stadiums, and Orange County,
California, voters endorsed the
decision by a local school board to
drop bilingual education.
In Houston voters chose to retain affirmative action policies,

bucking what had appeared to be a
nationwide trend in support of
abandoning such policies. A similar measure banning affirmative
action passed in California in 1996.
Questions
1. What was the pattern in elections across the country?
2. How did voters in Houston vote
on the ballot measure on affirmative action?
Burglaries and other forms of

property crime have fallen to their
lowest levels since 1980, according
to new FBI statistics. The decline
is unprecedented, said Scott
Decker, a criminologist at the
University of Missouri at St. Louis.
So large has the decline been
that the rate of property crime in
the United States is now equal to

that in Australia, New Zealand,
Canada, and the Netherlands.
London, which has about the same
population as New York, has 66
percent more thefts and 57 percent
more burglaries. Los Angeles, California has fewer burglaries per
capita than Sydney, Australia.
Violent Crimes
Property Crimes
Per 100,00 people

800
Per 100,00 people

7,000
700
6,000
600
5,000
500
4,000
400
3,000
300
200
2,000
100
0
1,000
0
1980
1985
1990
1980
1995
Robberies
1985
1990
1995
Law enforcement officials believe that the decline stems from

improved policing, the drop in size
of the teenage population, greater
community involvement, and
longer prison terms. The increased
use of burglar alarms may also
have contributed to the decline, and
the rise in more lucrative forms of
crime may additionally be at work.
Although property crime in the
United States is low relative to many
other industrial nations, violent
crime remains high. The murder
rate is 18 times as high as that in any
other industrial democracy, and the
rate of other violent crimes is also
much higher than elsewhere in the
industrial world.
Burglaries
Per 100,00 people

300
Per 100,00 people

2,000
Questions
250
1,500
200
1,000
150
100
500
50
0
0
1980
1985
1990
1995
1980
1985
1990
1995
1. How does the rate of property

crime in the United States compare to rates in other industrial
democracies?
2. What factors may account for
the decline?
GLENCOE
Property Crime Falls in United States
SUPREME COURT
Supreme Court Hears Cases,

Rules on Broad Range of Issues
Several important cases were heard by the Supreme Court, and the Court announced a number of important
decisions. Its decision not to hear other cases let stand important rulings by lower courts.
Affirmative
Action
The Supreme Court declined to
hear a case challenging the validity of Californias ban on affirmative action in public hiring, contracting, and school admission.
The refusal to hear the case means
that the ruling of the lower court
will stand. That ruling found that
Proposition 209, which California
voters passed in 1996, does not violate the Constitution. The ruling sends a green light
to citizens of other states, who can now act to end
racial preferences, said Tom Wood, cofounder of
Californians Against Discrimination and Preferences.
Participation in Televised Debate

The Court heard a case questioning the right of a
third-party candidate to participate in a political
debate organized and broadcast by a state public television network. The lower court held that Arkansas
Educational T.V. did not violate the Constitution
when it chose not to let a third-party candidate participate in the debate it televised. The lower court
argued that the station retained the right to make its
own editorial judgment about whether the candidate
should participate or not.
Meetings of the
Academy of Sciences
Committee meetings of the National Academy of
Sciences, an association of distinguished scientists that
advises the government on scientific matters, must be
open to the public, the Supreme Court determined
last year. The academy had argued that opening up its
meetings would give the government too much control over its proceedings and would reduce scientists
willingness to speak freely, especially if they were the
recipients of large government grants.
GLENCOE
Manufacturers
Price Ceilings
The Court ruled that manufacturers can legally set ceilings on the
prices retailers charge for their
products. Until the decisionone
of the most important antitrust rulings in yearsthe practice, known
as resale price maintenance, was
considered a violation of the Sherman Antitrust Act, which bans attempts by companies to fix prices.
The ruling means that stores or dealers cannot charge
customers more for a product than the suggested retail
price set by the manufacturer.
Right of Defendant to a
Polygraph Test
The Supreme Court heard arguments last fall on
whether defendants have the right to offer the results
of lie detector tests in their defense. Polygraph evidence is not admissible in military courts, and most
state courts allow such evidence to be admitted only
when both the prosecution and the defense agree to
do so. A lower court had ruled that defendants
whose credibility had been challenged had the right
to offer lie detector evidence that would confirm the
truth of their testimony. The government appealed
the ruling, arguing that the validity of polygraph evidence is too controversial to allow such evidence to
be admitted in court.
Questions
1. Why did the government argue against the right of
defendants to submit the results of voluntary lie
detector tests that support their innocence?
2. What is the implication of the Supreme Courts
refusal to review the lower courts finding in the
California affirmative action case?
SOCIOLOGY
Oldest Remnants of Native American

Culture Found in Louisiana
Earthen mounds built by an
ancient native American civilization about 5,400 years ago were
discovered in Louisiana last fall.
The mounds are believed to be
about 2,000 years older than any
other mounds found in North
America.
The discovery is important because it challenges traditional
thinking about early American cultures. We generally had believed
that mobile hunting and gathering
people would not have the capability to plan and organize such
construction, said Dr. Joe W. Saunders, a professor of Geosciences at
Northeast Louisiana University,

commenting on the 11 mounds and
connected ridges that his team discovered.
The new discoveries show that
early native Americans in what is
now the United States developed
independently from the cultures in
Mexico and Central America. Its
a rare and wonderful case where
one piece of research fundamentally changes our whole picture of
early American life, said Dr.
Vincas Steponaitis, an archaeologist at the University of North
Carolina at Chapel Hill.
The purpose of the mounds re-
mains a mystery. No human remains or burial areas have been

discovered in the mounds, and
there is no evidence that they
served a ceremonial function. I
know it sounds awfully Zen-like,
but maybe building them was the
purpose, observed Dr. Saunders.
Questions
1. What was the purpose of the
mounds?
2. How did the discovery change
archaeologists thinking about
ancient Native American culture?
Life Goals Changing Among Young Americans
Most Important Priorities

Percent
100
90
1989
1997
80
70
60
50
40
30
20
10
0
Close-knit
family life
Good job/
career
Doing well
financially
Involved in
religion
Help
community
president of the Ford Foundation. Those working in

the private sector view government as too bureaucratic, while those working in government believe
politics interferes with policymaking.
Questions
1. What did the poll of young people show about
their interest in public service?
2. Relative to 1989, how did young peoples views of
the importance of family and community life change?
GLENCOE
More and more young people in the United

States are interested in making a difference in the
lives of others, according to a poll commissioned by
the Partnership for Trust in Government last year,
although few want to work for the government.
The results of a survey of 505 Americans between
the ages of 18 and 34 reflect both increased interest
in the helping professions (such as teaching and
social work) and growing cynicism over the public
sector.
Teaching emerged as the number one career choice
among those polled. Social work also ranked high on
young peoples lists of jobs that attract them. We
have a group of people who are interested and available for public service, said pollster Peter Hart. Ask
them. Inspire them.
The poll also revealed an increase in the value
placed on family life and a decrease in the value
placed on having a good job or career (see opposite).
Although young people are revealing a growing
interest in service, cynicism about government is
high. Disillusionment with the public sector
threatens to drive talented young people away from
government, according to Susan Berresford, the
ASIA
Jiang Zemin Visits United States

Chinas President Jiang Zemin paid a state visit to
the United States last fall, the first such visit to the
United States by a Chinese president since the bloodshed in Beijings Tiananmen Square in 1989.
The visit, which included stops in Pearl Harbor,
Philadelphia, Boston, and Washington, D.C., resulted
in several important commercial agreements between
the United States and China but no narrowing of the
gap between the two countries on human rights issues.
During the visit, Jiang announced that China
would purchase $3 billion worth of civilian aircraft
from the United States. He also agreed to stop
helping Iran build nuclear power stations, which the
United States fears could be developed into nuclear
weapons plants. Termination of cooperation with
Iran could open the door to up to $60 billion in contracts for American companies.
Little headway was made on human rights during
the visit. President Clinton repeated the United

States position that China must respect human
rights. Jiang continued to justify Chinas human
rights policies, including the quelling of the demonstrations in Tiananmen Square, where 500 Chinese
demonstrators were killed by Chinese troops nine
years ago. Within several weeks of Jiangs return
home, however, one of Chinas leading dissidents,
Wei Jingshen, was released from prison and flown to
the United States for medical treatment.
Questions
1. What kind of agreements came out of the meeting
between the presidents of China and the United
States?
2. What issue continues to separate China and the
United States?
China to Privatize State-Owned Companies

More than 10,000 of Chinas 13,000 large and
medium-sized enterprises will be sold off as part of
the continuing shift in China away from socialism.
The move to private ownership represents a major
step toward rejecting the Communist system in favor
of capitalism and would have been unthinkable just a
few years ago.
The new policy was adopted at the Fifteenth Communist Party Congress, held last fall, during which
the party leadership was shaken up. Two members of
the Politburos standing committee, the seven-
member panel that runs China, were replaced with

allies of Jiang. The changes should allow Chinas
president to tighten his control over power.
Questions
1. What major policy shift was announced by the
Chinese government last fall? Why is that change
significant?
2. What does the personnel shake-up in the Politburo
mean for Jiang Zemins control over power?
Two Koreas Agree to Discuss Peace

North and South Korea met in Geneva in December
to discuss signing a formal peace treaty. The two countries have been bitter enemies since the Korean War,
which ended in 1953. No peace treaty was signed at
that time, and the two countries remain technically at
war.
The United States and China also attended the conference. The United States supported the South in the
Korean War and has remained a staunch supporter of
South Korea, which it considers one of its major allies.
China supported North Korea, which remains one of
GLENCOE
the few remaining hard-line Communist countries in

the world. Relations between the two Koreas have
long been among the tensest in the world. Almost 2
million troops are deployed on the border between the
two Koreas.
Questions
1. What have relations between the two Koreas been
like for the past 40 years?
2. How have relations changed in recent months?
ASIA
India and Pakistan Celebrate

50 Years of Independence
1757
1757: British East India Company

gains control of Bengal
1858
1858: British government

takes over rule of India
1940
1947: India and Pakistan

gain independence from
Great Britain
Rulers of Kashmir agree
to become part of India
1950
1948: Indian independence leader

Mohandas Gandhi is assassinated
by Hindu nationalist
1956: Pakistan declared

an Islamic republic
1960
1962: India loses a border
war with China
1966: Indira Gandhi
(the daughter of Jawaharlal
Nehru, Indias first prime
minister) becomes prime
minister of India
1971: India goes to war
with Pakistan on behalf of
the rebels in East Pakistan
New nation of Bangladesh
created in what had been
East Pakistan
1965: India and Pakistan

go to war over Kashmir
1970
1970: Cyclone and tidal wave kill

266,000 people in East Pakistan,
causing subsequent friction
between East and West Pakistan
1975: Indira Gandhi declares
state of emergency and suspends
constitution
1980
1984: Indira Gandhi assassinated
by her bodyguards; her son,
Rajiv Gandhi, becomes prime
minister
1990
1991: Rajiv Gandhi assassinated
by Tamil militant
Questions
1. What kinds of challenges do India and Pakistan
face?
2. What kind of political system does India have?
10
1997: Indian coalition government

of I.K. Gujral collapses
2000
GLENCOE
India and Pakistan celebrated 50 years of independence in 1997. The two countriesonce both part of
British Indiagained independence from Great
Britain in August 15, 1947, following almost 100 years
of British rule and nearly 200 years of British domination (see time line).
British India included both Muslims and Hindus,
with most of the Muslims residing in what is now
Pakistan. Beginning in the 1930s, Muslim leaders in
India began to press for a separate Muslim state after
eventual independence. The plan was eventually
approved, and at least 8 million Muslims and Hindus
were forcibly relocated as a result of the partition of
the country.
Indias achievement in remaining a unified, democratic country is remarkable to many observers. The
countrys 970 million people speak 17 languages and
22,000 distinct dialects, and six major religions are
practiced. Although the population of India had no
experience of democracy before independence, it has
remained democratic, despite the suspension of the
constitution by Prime Minister Indira Gandhi in 1975
(see time line). The country has also managed to feed
its population, which has tripled in size since independence and grows by 18 million people a year.
Already the second largest country in the world after
China, India will become the worlds most populous
nation by 2020 if current growth rates continue.
Although living conditions have improved in both
India and Pakistan, the two countries face enormous
social problems. In India 48 percent of the population
cannot read, and 36 percent of the population lives
below the official poverty line. Seventy percent of
Indians have no access to toilets, and 30 percent lack
access to safe water. Millions of people in India die
every year from diarrhea, tuberculosis, malaria, and
AIDS. In Pakistan life expectancy is only 60, GNP per
capita is just $460 a year, and more than 60 percent of
the population is illiterate.
ASIA
Terrorists in Pakistan Attack Americans

Pakistani terrorists killed four American businessmen in Karachi, the capital of Pakistan, last
November. The killings appeared to be in retaliation for
the conviction in Virginia of a Pakistani citizen for the
murder of two CIA employees in 1993. Militant Islamic
fundamentalists are believed to have been responsible.
The incident was the latest in a series of attacks on
Americans. Many of the terrorists now attacking
Americans were once supported by the United
States, which armed Pakistan and Afghani men to
fight the Soviet Union after it invaded Afghanistan
in the 1970s. After the war ended, most of these
armed fighters found themselves with nothing to do.

These guys are highly trained, highly motivated.
They are looking for a new enemy. The only thing
they know how to do is fight, Pakistans Information Minister, Mushahid Hussain, said.
Questions
1. Why have Americans been targeted by Pakistani
terrorists?
2. Who is believed to have been responsible for the
killing of four Americans in Pakistan last fall?
Government Collapses in India

The coalition government of Indian Prime Minister
I.K. Gujral fell last December, after the Congress
Party withdrew its support in Parliament. Midterm
elections will be held in mid-March, the second national elections in less than two years.
The defeat of the government has caused considerable internal instability. Indias currency, the rupee,
has fallen to its lowest level ever, and bills awaiting
passage in the legislature will now have to wait until

a new government is formed.
Questions
1. Why will new elections be held in India this spring?
2. What has been the effect of political instability in
India?
Bombing in Sri Lanka Targets Foreigners
Eighteen Sri Lankans were killed

and more than 100 others wounded
when a truck bomb exploded in
Colombo, the capital of Sri Lanka,
last fall. The wounded included
foreign tourists from 17 countries.

The incident appeared to be the
work of Tamil separatists, who targeted foreigners in an effort to dissuade foreign governments from
KEY FACTS
About Sri Lanka
Population: 18,553,074
Capital: Colombo
Exports: Garments and textiles, tea, diamonds
Annual income: $3,600
Ethnicity: Sinhalese 74%, Tamil 18%, Moor 7%, Burgher, Malay,
and Vedda 1%
Religions: Buddhist 69%, Hindu 15%, Christian 8%, Muslim 8%
Languages: Sinhala 74%, Tamil 18%
Life expectancy: 70 years for men, 75 years for women
GLENCOE
helping the government of Sri

Lanka fight the rebels.
Sri Lanka, once known as Ceylon, is an island nation of 18 million
people located off the southeast
coast of India. For years the government there has waged war against
the Tamil tigers, a guerilla group
that seeks an independent state for
Sri Lankas 3 million Tamils. At
least 50,000 people have been killed
in assassinations, bombings, and
battles between the government
and the guerillas.
Questions
1. Who is believed to have been
responsible for the bombing in
Sri Lanka?
2. What is the aim of the group?
CURRENT EVENTS UPDATE 11
AFRICA
Political Violence Wracks Algeria

The political violence that has
plagued Algeria since 1991 escalated last year, as hundreds of
people, including dozens of children, were murdered by Islamic
extremists. The attacks were the
deadliest yet in the seven-year war
between the Algerian government
and Islamic insurgents.
At least 62,000 people have died
in the conflict in Algeria in the past

seven years. Among the dead have
been dozens of journalists, whose
deaths have limited coverage of the
violence. The conflict began when
the government canceled elections
once it became clear that a fundamentalist Islamic party, the Islamic
Salvation Front, was likely to win.
The move enraged fundamentalists
KEY FACTS
About Algeria
Capital: Algiers
Exports: Petroleum and natural gas
in Algeria and raised questions

about the right of a government to
act undemocratically in order to
preserve democracy. After the canceled elections, the government
banned the Islamic Salvation Front.
Since then, the military wing of the
party has waged war against the
population.
In the 1997 local electionsthe
first to be held in Algeria since
1990the ruling party won 84 percent of municipal races and 70 percent of regional races. The results
prompted opposition party leaders
to question the legitimacy of the
elections.

Ethnicity: ArabBerber 99%, European less than 1%
Questions
Religions: Sunni Muslim (state religion) 99%, Christian and Jewish 1%

Languages: Arabic (official), French, Berber dialects
12
AR
SC
DA
GA
Questions
1. Where is Anjouan located?
2. Why does it want to give up its
independence and become a
French colony?
0
0
300 Kilometers
300 Miles
GLENCOE
COMOROS
MA
as a colony, something that the

French have stated they are not
willing to do. The desire to become
part of France was prompted by
the hope that recolonization would
improve health, education, and
living standards in the povertystricken country.
BIQUE
The tiny Indian Ocean island of

Anjouan declared itself an independent state last fall, following a referendum in which 99 percent of its
population favored secession from
Comoros. The island is one of three
main islands comprising Comoros,
a small country located off the east
coast of Africa between Mozambique and Madagascar. The government of Comoros refuses to accept
the results of the vote and insists
that Anjouan remains part of the
country.
Leaders of Anjouan hope that
France will agree to accept it back
Anjouan
ZAM
Tiny Island Secedes from Comoros
1. What incident set off the politcial violence in Algeria?

2. What were the results of the
1997 local elections?
MO
AFRICA
UN Investigates Charges Against Leaders

in the Democratic Republic of the Congo
Mounting evidence suggests that troops loyal to
Laurent Kabila, the leader of the Democratic Republic
of the Congo, committed mass murder when he overthrew the government of Mobutu Sese Seko last year.
The United Nations, which has been investigating the
reports, has heard strong testimony concerning at
least 14 mass killings and is trying to confirm another
200 unconfirmed reports.
Kabila was hailed as a liberator when he took over
the country then known as Zaire in the spring of
1997. His victory ended three decades of dictatorship
by Mobutu. But new evidence indicates that Kabila,
and the Rwandan troops that backed him, took

revenge on thousands of members of the Hutu tribe,
whom they reportedly killed and buried in mass
graves. Hundreds of thousands of Hutus fled to Zaire
after the genocide in Rwanda in 1994, in which at
least half a million Tutsis were murdered by Hutus.
Questions
1. What charges are the United Nations investigating
in the Democratic Republic of the Congo?
2. What would the motive for the crime have been?
Angolan Troops Intervene in Civil War in the Congo

Central
Africa
0
0
250
500 Kilometers
250
500 Miles
GO
RWANDA
Angola sent troops into the

Congo last fall, helping to overthrow the countrys president,
Pascal Lissouba. The move was
prompted by the Congos support
of rebels in Angola.
Angola has been embroiled in its
own civil war for more than 20
years. The war officially ended in
1994, when the leader of the National Union for the Total Independence of Angola (UNITA),
Jonas Savimbi, signed a peace
treaty. UNITA did not abide by the
terms of the treaty, however, using
the Congo and the country once
DEMOCRATIC
REPUBLIC
OF THE CONGO
Brazzaville
Kinshasa
BURUNDI
known as Zaire as bases for its

operations.
According to the United Nations, rebels in Angola have
planted land mines along highways that had been cleared of
mines following the 1994 peace
accord. Some 9 million land mines
are believed to remain planted in
Angola (see also page 19).
Luanda
Questions
ANGOLA
N
ZAMBIA
1. Why did Angola intervene in the

conflict in the Congo?
2. Who is Jonas Savimbi?
Lesotho Crowns King Letsie III

Last fall King Letsie III was crowned king of
Lesotho, a small mountainous country surrounded by
South Africa. The colorful ceremony was attended by
South Africas President Nelson Mandela, Britains
Prince Charles, and the Swazi and Zulu kings. More
than 20,000 enthusiastic supporters also attended the
coronation.
Nelson Mandela helped broker an agreement that
created more of a constitutional monarchy in Lesotho.
GLENCOE
Many people there hope that the king will restore

peace to a country that has suffered political upheaval
since winning independence from Britain in 1966.
Questions
1. Where is Lesotho located?
2. What role did Nelson Mandela play in helping
restore the king to power in Lesotho?
MIDDLE EAST
Threat of UN Military Intervention

Still Hangs Over Iraq
A confrontation between the
United Nations and Iraqi President
Saddam Hussein appeared to have
been resolved last fall, although
subsequent events still leave open
the possibility of a military confrontation. Russias Foreign Minister,
Yegeny Primakov, mediated the initial settlement, under which Iraq
backed down on its demand that

American members of the United
Nations team of weapons inspectors
be banned from the country.
The conflict began when Saddam Hussein refused to allow
American weapons inspectors to
operate in Iraq, claiming that they
were spies. The inspectors had
KEY FACTS
About Iraq
Capital: Baghdad
Exports: Crude oil and refined products, fertilizer, sulfur*
been part of the United Nations

team established following the Gulf
War to inspect military installations in Iraq for evidence that
chemical, biological, and nuclear
weapons of mass destruction are
being produced.
The United States reacted
harshly to Saddam Husseins demand and urged the United Nations to toughen sanctions against
Iraq.
Late last year, Saddam Hussein
refused to allow UN inspectors
inside his presidential palaces,
thereby reopening the possibility of
a military conflict.
Religions: Muslim 97% (Shia 6065%, Sunni 3237%), Christian or other 3%

Languages: Arabic, Kurdish (official in Kurdish regions), Assyrian, Armenian
*Exports have been severely limited by sanctions imposed by the United Nations
following the end of the Gulf War in 1991.
Questions
1. What is the United Nations team
of weapons inspectors looking
for in Iraq?
2. How was the initial conflict over
the participation of Americans
arms inspectors resolved?
Peace Process Between

Israel and the Palestinians Stagnates
Talks between Israel and the Palestinians over the
withdrawal of Israeli troops from the West Bank
stalled last year, following two suicide bombings that
killed dozens of Israelis. Israel has stated that it will
not hand over much new territory to the Palestinians
until Yasir Arafat, the Palestinian leader, does more
to combat terrorism. The Palestinians claim that the
government of Israeli Prime Minister Benjamin
Netanyahu is not serious about peace.
Frustrated with the pace of the peace process,
Arafat announced last fall that the Palestinians will
declare statehood in 1999, whether or not Israel
agrees. The announcement angered Israeli leaders,
14
who stressed that the two sides must agree on the nature of the final status of the peace agreement.
Frustrated with the lack of progress, the United
States has urged Israel to turn over more territory to
the Palestinians. Israel has refused to yield to U.S.
pressure, however.
Questions
1. Why is Israeli Prime Minister Benjamin Netanyahu
unwilling to implement the withdrawal of Israeli
troops from the West Bank?
2. What incidents derailed the peace talks?
GLENCOE
Ethnicity: Arab 75%80%, Kurdish 15%20%, Turkoman, Assyrian

or other 5%
EUROPE
French Official Tried for

Deporting Jews in World War II
Maurice Papon, the highest-ranking French official
to stand trial for war crimes committed during the
Nazi occupation of France, was tried in France last fall,
charged with complicity in German crimes against humanity. He is accused of having helped the Nazis send
1,690 French and foreign Jews, including 233 children,
to Drancy, a concentration camp in the north of France,
during World War II. Many of those sent to the camp
were eventually sent to Auschwitz, where they were
killed by the Nazis.
The Papon trial has gripped the French nation,
forcing it to come to terms with its role during World
War II, when the northern part of the country was
occupied by Germany and the rest of the country
was ruled from Vichy by a right-wing government.
The Vichy government passed racial laws that pre-
vented Jews from working as teachers, lawyers, or

doctors, and it cooperated extensively with the
Germans. Thousands of Jews were deported from
France, and many died in Nazi death camps.
For years the French claimed that the Vichy government was illegal and that it therefore bore no responsibility for acts committed during the regime. In recent
years, however, the French have begun to take responsibility for their failure to act on behalf of French and
foreign Jews living in France during the war.
Questions
1. Who is Maurice Papon and with what crimes was
he charged?
2. Why has the Papon trial gripped France?
France and Italy Move Toward 35-Hour Workweek

In an effort to reduce unemployment, France and Italy announced
last year that they will reduce the
length of the official workweek.
The hope is that the shorter workweek will increase the demand for
workers.
France will reduce the length of
its workweek to 35 hours beginning January 1, 2000. Italy has
pledged to reduce the workweek
from 40 hours to 35 hours by 2001.
Business leaders in France and

Italy, as well as member countries
of the European Union, condemned the move. Ideology has
triumphed over reason, said one
business leader. The new law will
be very bad for Europe and for the
euro [the European currency that
many European countries will
adopt in 1999]. Opposition politicians also denounced the new law,
which they predict will reduce the
Questions
1. Why did the French and Italian
governments decide to reduce the
length of the workweek?
2. Why do business leaders and
opposition politicians oppose the
idea?
Average Total Hourly

Compensation
for Production Workers
Average Weekly Hours

Worked in Manufacturing
$20
40
salary base and lead to an increase

in unemployment.
Unemployment Rate
15%
France
$19
35
10%
Italy
$18
30
$17
0
France
GLENCOE
Italy
United States
$0
United States
5%
France
Italy
United States
1990 91
92
93
94
95
96
97
EUROPE
Scotland and Wales Opt

for Independent Parliaments
Scottish and Welsh voters endorsed establishment
of their own parliaments in national elections held
last fall. The vote in Scotland was overwhelmingly
positive; in Wales the margin of victory was very
small.
The new legislatures will be responsible for a
range of issues, including virtually every aspect of
domestic life. The British Parliament will continue to
make decisions regarding foreign affairs, defense,
employment legislation, and social security.
Greater autonomy for Scotland and Wales was a
major issue in the last election in the United Kingdom, and the Labour Partys support of autonomy
was a decisive factor in its victory in that election.

Conservatives in the United Kingdom oppose independent parliaments. What is at stake is nothing
short of the union of the United Kingdom itself, said
Lady Margaret Thatcher, the former British Prime
Minister.
Question
1. What types of issues will the Scottish and Welsh parliaments handle?
2. Why did British conservatives oppose greater
autonomy for Scotland and Wales?
Leaders of Britain and IRA Meet

United Kingdom
N
SCOTLAND
NORTHERN
IRELAND
Belfast
IRELAND
AL
ENGLAND
an
n el
Cardiff
London
Ch
1. Why was the meeting between

Prime Minister Tony Blair and
Sinn Fein leader Gerry Adams
significant?
2. What is promising about the
peace talks over the future of
Northern Ireland?
Dublin
UNITED
KINGDOM
0
0
150 Kilometers
150 Miles
E n gl
is h
FRANCE
New President of Ireland Elected in Landslide Vote

Mary McAleese, a 46-year-old lawyer and former
university official from Belfast, became president of
Ireland last October, capturing a record 59 percent of
the vote. She is the first Irish president from Northern
Ireland, which is part of Great Britain. As a resident
of Northern Ireland she was not permitted to vote in
the election, but she is allowed to hold office.
McAleese, whose own family was forced out of a
16
Protestant neighborhood in the 1970s, has promised

to reach out to the North and to do what she can to
promote peace there.
Question
1. Where is the new president of Ireland from?
2. What is her main goal as president?
GLENCOE
Question
NORTH
SEA
Edinburgh
ES
previously refused to negotiate

with Sinn Fein. Most Catholics in
the six counties that comprise
Northern Ireland want the British
to leave the area. Most Protestants
in Northern Ireland want the area
to remain part of the United
Kingdom.
A historic meeting took place last

fall between Tony Blair, the British
Prime Minister, and Gerry Adams,
the head of Sinn Fein, the political
wing of the Irish Republican Army
(IRA). The meeting between the
two men represented the first time a
British Prime Minister and a Sinn
Fein leader have met since 1921,
when the partition of Ireland took
place.
Sinn Fein and the British
Government have been involved in
peace talks over the future of
Northern Ireland since last fall. The
talks are being attended by members of the Ulster Union, the
Protestant political party that had
CANADA
Canada to Preserve Huge Area

in British Columbia
Canada will set aside more than
2.5 million acres of wilderness in the
Rocky Mountains of British Columbia as a protected area, the Cana-
dian government announced last

fall. In addition, an enormous area
surrounding the wilderness preserve will be designated a buffer
Canada
GREENLAND
Beaufort
Sea
AT
Baffin
Bay
ICELAND
LA
NTI
,,
,,
Muskwa-Kechika area
AN
C OCE
Hudson
Bay
British
Columbia
A
Quebec
250
500 Kilometers
250
500 Miles
U N I T E D S TAT E S
zone, in which only limited development will be permitted. The

buffer zone was established to protect the wilderness from being damaged by development of the natural
gas reserves that have been discovered in the region. As a result, some
10 million acres of land in northeastern British Columbia will be set
aside as official wilderness.
This is a decision on the scale of
Yellowstone [National Park] in
terms of its significance for conversion in North America, said the
executive director of the Canadian
Parks and Wilderness Society. The
area to be preserved includes beautiful mountain ranges, rivers, and
deep valleys and is home to caribou,
grizzly bears, and wolves.
Questions
1. How large an area has the Canadian government decided to preserve?
2. Where is British Columbia located?
Separatist Spirit Remains Alive in Quebec

Supporters of an independent
Quebec plan to call for another referendum on independence within
the next few years, hoping to create
a separate French-speaking country in what is now one of Canadas
eleven provinces. A referendum on
the issue in 1995 narrowly failed,
with slightly less than half of the
voters in Quebec voting for independence.
Over the past 25 years, Quebecs
French-speaking residents have become increasingly alienated from
English-speaking Canadians. They
GLENCOE
fear that their language and culture

will be lost amid 300 million
Anglophones, or English-speaking
people, in the United States and
Canada.
Although Quebecs population
is greater than that of Denmark
and its territory larger than that of
France, its economy would suffer
as a result of independence. Despite the anticipated drop in income for residents of Quebec, however, many Quebecois would
prefer to live in an independent
French-speaking country than con-
tinue to live as an ethnic minority

within Canada. Most Englishspeaking Canadians oppose independence for Quebec, which they
believe would begin a process of
national disintegration.
Questions
1. Why do many French-speaking
people in Quebec want independence?
2. How do the Quebecois hope to
achieve independence?
LATIN AMERICA
Montserrat Buried in Volcanic Ash

A massive volcano buried the
tiny Caribbean island of Montserrat
last year, destroying thousands of
homes and displacing three-fourths
of the islands people. The once dormant volcano, which had been ac-
tive since 1995, spewed burning rock

onto the surrounding areas, burying
the countrys abandoned capital,
Plymouth. The volcano last erupted
400 years ago, and a major eruption
had not occurred in 10,000 years.
VIR
N
GI
IS
Antigua
St. Kitts
Nevis
Montserrat
CUBA
0
0
75 150 Kilometers
100
Jamaica
PUERTO
RICO
HAITI
150 Miles
DOMINICAN
REPUBLIC
The Caribbean
Area of Inset
The economic effect of the volcano has been devastating. About

7,000 residents of the former British
colony have left the island, settling
in neighboring Antigua or Britain.
Tourism is dead, and 60 percent of
the population is unemployed. With
only 4,000 people remaining on the
island and the threat of additional
volcanic eruptions, there is almost
no hope for a viable economy.
Questions
1. How many residents remain in
Montserrat?
2. How has the volcano affected the
economy?
Brazilian Stock Market Plunges

In November the Brazilian government took steps
to stabilize its economy by announcing a series of
about 50 new austerity measures. The measures,
which include both tax increases and spending cuts,
are expected to save the government an estimated $18
billion, which should reduce the countrys current
account deficit by half.
Questions
1. What happened to stock prices in Brazil last year?
2. What was the cause of the change?
Pope John Paul II to Visit Cuba

Pope John Paul II planned to visit Cuba in January
1998. The purpose of the trip was to seek more political liberty and freedom for Catholics in Cuba.
The communist government of Cuba, led by
President Fidel Castro, hoped that the Popes visit
would help generate international opposition to the
embargo on Cuba by the United States, which has
been in effect singe 1963. The embargo was recently
stiffened by passage of the Helms-Burton Act, which
penalizes foreign companies that invest in Cuba. The
18
Pope has condemned efforts by the United States to

hurt Cuba economically in order to undermine the
regime there.
Questions
1. What did the Pope hope to achieve in visiting
Cuba?
2. What did Cubas President, Fidel Castro, hope to
achieve with the Popes visit?
GLENCOE
Stock markets throughout Latin America plunged

last fall, following the crisis that began in Asia (see
page 1). The effects were most acute in Brazil, where
stock prices fell 27 percent, reaching their lowest level
since 1990. Losses were also heavy in Argentina,
Mexico, and Venezuela, where investors suffered
much deeper losses than in the United States.
Investors have been concerned about the stability
of Brazils currency, the real, which many observers
believe is overvalued by as much as 30 percent.
Worries over the solvency of several Brazilian investment banks and over the countrys high current
account deficit have also reduced stock prices.
INTERNATIONAL
Nobel Peace Prize Awarded

to Anti-Land Mine Activist
The 1997 Nobel Peace Prize was
awarded to the U.S.based International Campaign to Ban Land Mines
and its coordinator, Jody Williams.
The group was widely credited with
helping move world leaders toward
acceptance of the treaty banning

land mines, signed by 121 nations
last December.
Although support for the treaty
is widespread, several countries, including the United States, Russia,
Top Ten Countries

with Land Mines
Croatia
1 million
Bosnia-Herzegovina
1 million
Iraq
510 million
Afghanistan
910 million
Kuwait
Western Sahara
Cambodia
5 million
12 million
47 million
China, Cuba, India, Pakistan, Iran,

and Iraq, oppose the Ottawa treaty.
The United States refuses to sign the
treaty because it believes it needs
land mines to maintain stability on
the Korean Peninsula. Removing
the thousands of mines planted
along the demilitarized zone separating North and South Korea
would endanger the lives of thousands of soldiers, according to
American officials.
Around the world more than 100
million land mines remain in the
ground, according to the Nobel committee, many of them unmarked.
Every year thousands of people are
killed by mines, some of which were
planted decades ago.
Somalia
1 million
Questions
Angola
9 million
Mozambique
12 million
500 1000 Kilometers

500
1000 Miles
1. What international treaty grew

out of the work of the International Campaign to Ban Land
Mines?
2. What is the United Statess position on land mines?
El Nio Expected to Disrupt Climate Throughout World

The warmer waters of the Pacific Ocean known as
El Nio are expected to cause climatic problems
throughout the world this year. Drought is expected
in Australia and parts of Asia, and precipitation is
expected to be heavy in South America, according to
forecasters. Rainfall will be abnormally high in
California and the southern United States and abnormally low in the Ohio Valley, the Midwest (east of
the Mississippi), and Montana.
El Nio is caused by naturally occurring changes
in atmospheric pressure and ocean movements that
warm the waters of the Pacific Ocean near the
Equator. As the water warms, energy and moisture
GLENCOE
are pumped into the atmosphere, changing wind and

rainfall patterns across the globe. The severity of El
Nio depends on how warm the water becomes.
The effects of the change can be devastating. In
198283, more than 1,000 people died as a result of
changes caused by El Nio, and the economic cost of
the damage was enormous.
Questions
1. What is El Nio?
2. What weather changes are expected in the United
States this year as a result of El Nio?
INTERNATIONAL
Agreement Reached on
Reducing Greenhouse Emissions
Delegates representing more than
150 nations met in Kyoto last December, where they reached agreement on measures to reduce emissions that cause global warming.
According to the terms of the agreement, 38 industrial countries will
agree to mandatory reductions of socalled greenhouse gases below 1990
levels by 20082012. The United
States will reduce its emissions by 7
percent, the European Union will
reduce its emissions by 8 percent,
and Japan will reduce its emissions
by 6 percent. Overall the 38 nations
will cut emissions by more than 5
percent below 1990 levels.
The Kyoto accord imposes no
binding targets for developing nations, which are asked only to set
voluntary goals. The United States
insists that developing countries
share some of the burden of reducing emissions and hopes to persuade such countries to do so at a
meeting in Buenos Aires scheduled

for next year.
Greenhouse gases are produced
by the burning of coal, oil, and gas
by automobiles and industrial
plants. Such gases produce subtle
changes in temperatures that could
have catastrophic effects on ecosystems and weather patterns. According to a panel of scientists advising
the United Nations, unless action is
Emissions of Carbon Gases
from Energy Production
Country
1,328
United States
Former
Soviet Union
998
taken, the mean temperature of the

earths surfaces will rise 1.03.5
degrees Celsius by 2100more than
it rose in the previous 10,000 years.
Sea level will rise 1595 centimeters,
displacing tens of millions of people
throughout the world and vastly
increasing the number of people at
risk for flooding from storm surges.
Throughout the world the composition of species in forests would
change, and in some regions entire
forests could disappear. Weather
patterns that cause such destructive
events as summer droughts winter
floods, and hurricanes are likely to
be much more frequent.
647
China
Japan
291
Questions
Germany 268
India
164
Great Britain
159
0
500
1,000
1,500
Millions of Metric Tons
1. What are the terms of the Kyoto

accord on global warming?
2. What are some of the consequences of global warming?
Aid from 25 of the worlds wealthiest countries to

developing countries fell 6 percent to $55.8 billion in
1996, reaching its lowest level in 50 years. Eleven industrial countries, including the United States and Japan,
cut their aid in 1996. The United States contributed just
0.12 percent of its gross domestic product (GDP) to help
developing nations, about half as much as the average
wealthy nation, for which the figure was 0.25 percent of
GDP. Worldwide private donations to poor countries
rose $80 million in 1996 to $234 billion, more than four
times the amount donated by governments.
Questions
1. What happened to aid to developing countries in
1996?
2. What is the main source of aid to developing countries?
20
Geographic Update
The following cities and countries recently

changed their names or the spelling of
their names.
Old
New
Bombay (India)
Mumbai
Kazakstan
Kazakhstan
Madras (India)
Chennai
Western Samoa
Samoa
Zaire
Democratic Republic
of the Congo
GLENCOE
Foreign Aid Fell in 1996
SURFING THE WEB
American Studies Web Provides Wealth of

Information on Social Studies
The American Studies Web (http://www.georgetown.edu/crossroads/asw/) is a gold mine of resources for
social studies students. The site is organized into major categories, seven of which pertain to social studies:
Economy and Politics

Race and Ethnicity
Sociology and Demography
Region and Environment
Historical and Archival Resources
Current Events and Legal Studies
Philosophy and Religion
The historical and archival resource links and hyperlinks are particularly valuable for history students. Sources
include both primary and secondary resources. Typical links include the following:
National Civil Rights MuseumInterpretive exhibits that form the main body of the National Civil
Rights Museum, structured as a series of vignettes of key events in the civil rights movement
1492: An Ongoing Voyageexhibit of the Library of Congress

Eighteenth Century Resourceslinks to scholarship and information on the 1700s
Archiving Early Americaoriginal newspapers, maps, and writings from eighteenth-century America,
including authentic documents covering the Colonial period, the War of Independence, and the presidencies
of George Washington and Thomas Jefferson
Stories of the Irish Faminearticles on the Irish Famine (1845-1850) selected from The Illustrated
London News, including links to accompanying engravings.
Historical Society Pagelinks to more than 800 American history sites on the Web
General history resources include the Tennessee Technological University site, which provides extensive links
to history-related information on the Internet; the American History and American Studies site, which provides
links to information from the Yale University Library; the CIA World Factbook site, which provides facts and figures on 247 countries; and the University of Texas and University of Georgia sites, which provide rare maps.
GLENCOE
NAME ______________________________________DATE ________________CLASS___________________
Charting the U.S. Economy

Third Quarter (JulySeptember 1997)
The graphs below show some of the changes in the United States economy during the third quarter
of 1997. Use the graphs to answer the questions.
Housing Starts
Industrial Production
Millions of units,
seasonally adjusted
1.7
1.5
1.6
1.5
1.4
1.3
1.2
1.1
1.0
O N D
1996
F M A M J
1997
Source: U.S. Dept. of Commerce
New orders
billions of dollars, seasonally adjusted
$190
$185.7
Billions of dollars,
seasonally adjusted
$5,600
$5,550
$180
$5,500
$175
$5,450
$170
$5,400
$165
$5,350
$160
$5,300
$155
$5,250
J
Personal Spending
$185
O N D
1996
Source: Federal Reserve Board
Durable Goods
122.4
F M A M J
1997
O N D
1996
$5,547
F M A M J
1997
1. Which graph reflects sales of refrigerators and washing machines? _____________________

2. Which graph reflects automobile production? _______________________________________
3. Which graph shows how much consumers spent? ___________________________________
Identify the graph that relates to each statement.
4. Production peaked in September. __________________________________________________
5. About 1.5 million new houses were begun in September. _____________________________
6. Spending rose in 1997. ___________________________________________________________
7. December and January were slow months for carpenters. _____________________________
Critical Thinking: Do these graphs indicate that the economy is growing? Why or why not?
22
GLENCOE
Seasonally adjusted index, 1987 = 100

123
122
121
120
119
118
117
116
115
114
0
O N D
J F M A M J
1996
1997
NAME ______________________________________DATE ________________CLASS ___________________
Charting the U.S. Economy

Third Quarter (JulySeptember 1997)
The graphs below show some of the changes in the United States economy during the third quarter
of 1997. Use the graphs to answer the questions.
Factory Orders
Index of Leading Indicators
seasonally adjusted
$340
$336.5
Seasonally adjusted index,

1992 = 100
105
$330
104
$320
103
$310
102
$300
101
$290
100
$280
99
$270
98
O N D
1996
F M A M J
1997
O N D
1996
F M A M J
1997
Personal Income
seasonally adjusted at annual rate
$6,950
$6,900
$6,850
$6,800
$6,750
$6,700
$6,650
$6,600
$6,550
$6,500
0
O N D
J F M A M J
1996
1997
104.4
Consumer Prices
$6,941
Percent change from previous year,

seasonally adjusted
3.5%
3.0%
2.1%
2.5%
2.0%
1.5%
1.0%
0.5%
0
J
0.5%
O N D
1996
F M A M J
1997
Source: Bureau of Labor Statistics
1. What happened to personal income in the third quarter of 1997? _______________________

2. How did consumer prices change in the third quarter of 1997? ________________________
3. Which quarter was the strongest for factory orders? __________________________________
Identify the graph that relates to each statement.
4. Income rose to more than $6.9 trillion in the third quarter of 1997. _____________________
5. Inflation was low throughout 1997. ________________________________________________
6. Plants have started calling back laid-off workers after strong performance in 1997. _______
________________________________________________________________________________
7. The economic outlook for the future looks good. _____________________________________
Critical Thinking: What are leading indicators? Why are they important? What do they tell
economists?
GLENCOE
NATIONS OF LATIN AMERICA AND THE CARIBBEAN

Table 1
Capital
Population
Antigua and
Barbuda
St. Johns
Argentina
Buenos
Aires
34,672,997
Bahamas
Nassau
Barbados
65,647
Major Ethnic
Groups
Black, British,
Portuguese,
Lebanese, Syrian
Exports
Imports
Pertinent
Petroleum
products,
manufactures,
food and
live animals
Food and live

animals,
machinery and
transport
equipment,
manufactures,
chemicals, oil
Machinery and
equipment,
chemicals,
metals, fuels
and lubricants,
agricultural
products
Foodstuffs,
manufactured
goods, crude
oil, vehicles,
electronics
Consumer
goods,
machinery,
foodstuffs,
construction
materials,
chemicals, fuel,
electrical
components
Machinery and
transportation
equipment, food,
manufactured
goods, fuels,
chemicals,
pharmaceuticals
Capital goods,
chemicals,
petroleum,
food
Crude oil,
capital goods,
chemical
products, coal,
foodstuffs
Tourism dominates
economy
$6,600
Rich in natural resources;

highly literate population,
export-oriented,
agricultural sector, and
diversified industrial base
$8,100
White 85%;
Mestizo, Indian,
or other nonwhite
groups 15%
Meat, wheat,
corn, oilseed,
manufactures
259,367
Black 85%,
white 15%
Bridgetown
257,030
African 80%,
European 4%,
other 16%
Pharmaceuticals,
cement, rum,
crawfish, refined
petroleum
products
Sugar and
molasses, rum,
other foods and
beverages,
chemicals,
electrical
components,
clothing
Belize
Belmopan
219,296
Mestizo 44%,
Creole 30%,
Maya 11%,
Garifuna 7%,
other 8%
Sugar, citrus
fruits, bananas,
clothing, fish
products,
molasses, wood
Bolivia
La Paz,
Sucre
7,165,257
Metals, natural
gas, soybeans,
jewelry, wood
Brazil
Brasilia
162,661,214
Quechua 30%,
Aymara 25%,
Mestizo 2530%,
European 515%
White 55%,
mixed white
and African 38%,
African 6%
Chile
Santiago
14,333,258
European and
European-Indian
95%, Indian 3%,
other 2%
Colombia
Bogot
36,813,161
Costa Rica
San Jos
3,463,083
Mestizo 58%,
white 20%,
mulatto 14%,
black 4%,
mixed blackIndian 3%,
Indian 1%
White (including
Mestizo) 96%,
black 2%, Indian
1%, Chinese 1%
Cuba
Havana
10,951,334
Dominica
Roseau
82,926
Dominican
Republic
Santo
Domingo
24
8,088,881
Iron ore, soybean

bran, orange
juice, footwear,
coffee, motor
vehicle parts
Copper, other
metals and
minerals, wood
products, fish
and fishmeal, fruit
Petroleum,
coffee, coal,
bananas, fresh
cut flowers
Coffee, bananas,
textiles, sugar
Mulatto 51%,
white 37%,
black 11%,
Chinese 1%
Black, Carib
Indians
Sugar, nickel,
shellfish, tobacco,
medical products,
citrus, coffee
Bananas, soap,
bay oil,
vegetables
grapefruit,
oranges
White 16%,
black 11%,
mixed 73%
Ferro nickel,
sugar, gold,
coffee, cocoa
Capital goods,
spare parts,
raw materials,
petroleum,
foodstuffs
Industrial
equipment,
transportation
equipment,
consumer goods,
chemicals,
paper products
Raw materials,
consumer
goods, capital
equipment,
petroleum
Petroleum,
food, machinery,
chemicals
Per Capita
Economy heavily
dependent on tourism
and offshore banking
$18,700
Historically, economy
dependent on sugarcane
cultivation and related
activities, but in recent
years, diversified into
manufacturing and
tourism
$9,800
Essentially private
enterprise economy based
primarily on agriculture,
agro-based industry, and
merchandising
$2,750
One of the poorest and

least developed countries
in Latin America
$2,530
Largest GDP by far in

South America; large and
well-developed
agricultural, mining
manufacturing, and
service sectors
Prosperous, essentially
free market economy
$6,100
GDP has expanded

every year for more than
25 years
$5,300
Long tradition of
democracy and respect
for human rights
$5,400
$8,000
Communist government
retains primary role in
the economy and controls
practically all foreign trade
Manufactured
Highly dependent on
goods,
agriculture; development
machinery and
of tourism remains
equipment,
difficult because of
food, chemicals
rugged coastline and
lack of international airport
Foodstuffs,
Middle-income
petroleum,
developing country
cotton and fabrics, primarily dependent on
chemicals and
agriculture, trade, and
pharmaceuticals services, especially tourism
$1,300
$2,450
$3,400
GLENCOE
Country
Table 1 (continued)
Country
Capital
Ecuador
Quito
El Salvador
San
Salvador
5,828,987
French
Guiana
Cayenne
151,187
Grenada
St. Georges
Guatemala
Guatemala
City
Guyana
Georgetown
Haiti
Port-au-Prince
6,731,539
Honduras
Tegucigalpa
5,605,193
Mestizo 90%,
Indian 7%, black
2%, white 1%
Bananas, coffee,
shrimp, lobster,
minerals, meat,
lumber
Jamaica
Kingston
2,595,275
Alumina, bauxite,
sugar, bananas,
rum
Mexico
Mexico City
African 76%, AfroEuropean 15%,

East Indian and
Afro-East Indian
3%, white 3%,
Chinese and AfroChinese 1%
Mestizo 60%,
Amerindian 30%,
white 9%,
other 1%
Nicaragua
Managua
4,272,352
Mestizo 69%,
white 17%,
black 9%,
indigenous 5%
Coffee, seafood,
beef, sugar,
industrial goods,
gold, bananas,
sesame products
Panama
Panama City
2,540,000
Mestizo 70%,
West Indian 14%,
white 10%,
Indian 6%
Bananas, shrimp,
sugar, coffee,
clothing
Paraguay
Asuncin
5,504,146
Mestizo 95%,
whites and
Amerindians 5%
Cotton, soybeans,
timber, vegetable
oils, meat
products, coffee,
tung oil
GLENCOE
Population
11,466,291
94,961
11,277,614
712,019
95,772,462
Major Ethnic
Groups
Mestizo 55%,
Indian 25%,
Spanish 10%,
black 10%
Exports
Imports
Pertinent
Petroleum,
bananas, shrimp,
cocoa, coffee
Transport
equipment,
consumer goods,
vehicles,
machinery,
chemicals
Raw materials,
consumer goods,
capital goods
Substantial oil resources

and rich agricultural
areas
$4,100
Impact of 197990 civil

war on economy was
devastating, costing the
country about $2.2 billion
Territory of France;
economy tied closely to
that of France through
subsidies and imports
$1,950
Essentially agricultural
$3,000
Most of population is
rural, though urbanization
is accelerating
$3,300
One of poorest countries

in Western Hemisphere
$2,200
Mestizo 94%,
Indian 5%,
white 1%
Coffee,
sugarcane,
shrimp
Black or mulatto
66%, white 12%,
east Indian, Chinese
Amerindian 12%,
other 10%
Black
Shrimp, timber,
rum, rosewood
essence
Mestizo 56%,
Amerindian or
predominantly
Amerindian 44%
East Indian 51%,
black and mixed
43%, Amerindian
4%, European
and Chinese 2%
Black 95%, mulatto
and European 5%
Bananas, cocoa,
nutmeg, fruit
and vegetables,
clothing, mace
Coffee, sugar,
bananas,
cardamom, beef
Sugar,
bauxite/alumina,
rice, shrimp,
molasses
Light
manufactures,
coffee, other
agriculture
Crude oil, oil

products, coffee,
silver, engines,
motor vehicles,
cotton, consumer
electronics
Food (grains,
processed meat),
other consumer
goods, producer
goods, petroleum
Manufactured
goods,
machinery,
chemicals, fuel
Fuel and
petroleum
products,
machinery,
grain, fertilizers,
motor vehicles
Manufactures,
machinery,
petroleum, food
Per Capita
$6,000
Machines and
Political turmoil has
manufactures,
ravaged country; about
food and
75% of population lives in
beverages,
abject poverty
petroleum
products, chemicals,
fats and oil
Machinery and
Plagued with nearly 300
transport
internal rebellions, civil
equipment,
wars, and changes of
chemical
government
products,
manufactured
goods, fuel and
oil, foodstuffs
Machinery and
Regional leader in
transport
economic reform
equipment,
construction
materials, fuel,
food, chemicals
$1,000
Metal-working
machines, steel
mill products,
agricultural
machinery,
electrical
equipment, car
parts for assembly
Petroleum,
agricultural
supplies,
manufactured
goods
About 70% of people live

in urban areas; many
Mexicans emigrate from
rural areas that lack job
opportunities
$7,700
Most Nicaraguans have

both European and Indian
ancestry, and the culture
reflects the Ibero-European
and Indian heritage of
its people
Banking, insurance,
government, Panama
Canal fees are main
sources of income
$1,700
Capital goods,
crude oil,
foodstuffs, other
consumer and
intermediate goods
Capital goods,
45% of population works
foodstuffs,
in agriculture, often on
consumer goods, subsistence basis
raw materials,
fuels
$1,980
$3,200
$2,500
$3,200

Table 1 (continued)
Capital
Peru
Lima
Puerto Rico
San Juan
St. Kitts and

Nevis
Basseterre
St. Lucia
Castries
St. Vincent
and the
Grenadines
Population
24,523,408
Exports
Imports
Pertinent
Copper, zinc,
fishmeal, crude
petroleum and
by-products, lead,
refined silver,
coffee, cotton
Machinery,
transport
equipment,
foodstuffs,
petroleum, iron
and steel,
chemicals,
pharmaceuticals
Chemicals,
clothing, food,
fish, petroleum
products
Economy improving
after decades of high
inflation, unproductive
investment policies,
high foreign debt,
subsidies, government
mismanagement
and corruption
One of most dynamic
economies in Caribbean;
industry has surpassed
agriculture as primary
sector of economic
activity and income
Traditionally dependent
on growing and processing
of sugarcane, but tourism
and export-oriented
manufacturing have begun
to assume larger roles
Economy remains
vulnerable because of
heavy dependence on
banana production,
which is subject
to periodic droughts
and tropical storms
Agriculture, dominated
by banana production,
is most important
sector of economy
Hispanic
Pharmaceuticals,
electronics,
apparel
Black
Machinery, sugar,
electronics,
beverages and
tobacco
Machinery,
manufactures,
food, fuels
157,862
Black 90%,
mixed 6%,
East Indian 3%
Bananas, clothing,
cocoa, vegetables,
fruit, coconut oil
Kingstown
118,344
Black, white, East

Indian, Carib
Indian
Bananas, other
agricultural
products
Suriname
Paramaribo
436,418
Alumina,
aluminum,
shrimp and fish,
rice, bananas
Trinidad and
Tobago
Port-of-Spain
1,272,385
Hindustani 37%,
Creole (mixed
European and
African) 31%,
Javanese 15%, black
10%, Amerindian
3%, other 3%
Black 43%, East
Indian 40%, mixed
14%, other 3%
Manufactured
goods,
machinery,
transportation
equipment, food
and live animals,
chemicals, fuels
Foodstuffs,
machinery and
equipment,
chemicals and
fertilizers,
minerals and fuels
Capital
equipment,
petroleum,
foodstuffs,
cotton,
consumer goods
Uruguay
Montevideo
3,238,952
Venezuela
Caracas
U.S. Virgin
Islands
Charlotte
Amalie
26
3,819,023
Major
Groups
Indian 45%;
Mestizo 37%;
white 15%; black,
Japanese, Chinese,
other 3%
41,369
21,983,188
97,120
White 86%,
Mestizo 8%,
black 40%,
other, 2%
Mestizo 67%,
white 21%,
black 10%,
Amerindian 2%
Black 80%, white

15%, other 5%
Per Capita
$3,600
$7,800
$5,380
$4,080
$2,060
Population is one of most

ethnically varied in the
world, with each ethnic
group preserving its own
culture
$12,100
Petroleum and
petroleum
products,
chemicals, steel
products,
fertilizer, sugar,
cocoa, coffee,
citrus, flowers
Wool and textile
manufactures,
beef and other
animal products,
leather, rice
Machinery,
transportation
equipment,
manufactured
goods, food,
live animals
Countrys oil- and

petrochemical-dependent
economy enjoys high per
capita income, although
living standards have
declined since boom years
of 197382
$12,100
Machinery and
equipment,
vehicles,
chemicals,
minerals, plastics
$7,600
Petroleum,
bauxite and
aluminum, steel,
chemicals,
agricultural
products, basic
manufactures
Sugar,
petroleum
refining, watch
assembly, rum
distilling
Raw materials,
machinery and
equipment,
transport
equipment,
construction
materials
Crude oil,
foodstuffs,
consumer goods,
building
materials
Excessive bureaucracy,
inefficient state
monopolies, persistent
inflation, and labor unrest
here led to drop in real
income since the 1960s and
low level of investment
Petroleum sector
continues to dominate
economy
Administered as territory
of U.S.; tourism is primary
economic activity
$9,300
$12,500
GLENCOE
Country
MAP OF LATIN AMERICA

Figure 1
Latin America
0
0
250
500
250
GLENCOE
750
500
1000 Kilometers
750
1000 Miles
NAME ______________________________________DATE ________________CLASS___________________
Worksheet to accompany Figure 1 and Table 1.
Nations of Latin America and

the Caribbean
The map (Figure 1) shows the location of every country in Latin America and the Caribbean. Use an
atlas to label the countries and the capital cities, and then add and label the physical features listed
below. Record the area of each country on the map as well.
Amazon River
Cape Horn
Guiana Highlands
Gulf of Honduras
Lake Titicaca
Pacific Ocean
Putamayo River
Sierra Madre Occidental
Tropic of Cancer
Andes Mountains
Caribbean Sea
Gulf of California
Gulf of Panam
Mt. Aconcagua
Panama Canal
Mato Grosso Plateau
Strait of Magellan
Tropic of Capricorn
Patagonia Pampas
Equator
Campeche Bay
Lake Nicaragua
Orinoco River
Paraguay River
Iguau Falls
Baja California
Yucatn Peninsula
1. What is the largest country in Latin America? _______________________________________

________________________________________________________________________________
2. What is the most populous country in Latin America? ________________________________
________________________________________________________________________________
3. Through which countries does the Amazon River run? _______________________________
________________________________________________________________________________
4. Through which countries in Latin America does the Equator run? ______________________
________________________________________________________________________________
________________________________________________________________________________
6. What are the five poorest countries in Latin America and the Caribbean? ________________
________________________________________________________________________________
7. What kinds of products do most of the poorest Latin American and Caribbean countries
export? _________________________________________________________________________
________________________________________________________________________________
8. What is the temperature likely to be in southern Chile in August? ______________________
________________________________________________________________________________
9. What is the highest mountain range in Latin America? Through which countries does it run?
________________________________________________________________________________
28
GLENCOE
5. Which Latin American country is in North America? _________________________________
ANSWER KEY
SPECIAL REPORT: WORLD STOCK MARKET
SHAKE-UP
Stock Markets Around the World Tumble (p. 1)
1. Economic conditions in Thailand, the Philippines,
Malaysia, Indonesia, and Hong Kong triggered
declines in stock markets throughout the world.
2. Prices fell 30 percent in four days in Hong Kong.
Losses in the United States, Britain, Japan, and
France ranged from 8 to 13 percent.
Markets Rebound Quickly in United States (p. 2)
1. The average share on the New York Stock Exchange
fell by more than 7 percent in a single day last
October.
2. The fall was set off by the collapse of stock markets
in Asia.
Fed Chairman Sees Silver Lining to Stock Market
Decline (p. 2)
1. Alan Greenspan believes the decline in the stock
market could reduce the risk of rising inflation.
2. He is concerned about interest rates because as
Chairman of the Federal Reserve Board he is
responsible for raising and lowering them.
Currencies Depreciate Across Southeast Asia (p. 3)
1. Currencies lost 6391 percent of their value last fall.
2. Singapores currency lost the most value91%.
Prime Minister Resigns in Thailand After Failing to
Manage Economy (p. 3)
1. The Prime Minister resigned because he had been
blamed for failing to manage the Thai economy.
2. The effect has been severe. Poor people are reportedly taking their children out of school so they can
send them to work; rich people are reportedly
selling off assets.
UNITED STATES
Campaign Finance Defeated by Senate (p. 4)
1. The defeated bill would have banned contributions
of soft money.
2. The bill was sponsored following the White House
scandal over campaign finance.
Health Care Coverage of Children Expanded (p. 4)
1. About 5 million children will receive health care
coverage.
2. Passage of the welfare reform law, which will terminate federally funded medical insurance for millions of people, spurred passage of the reform.
Reform of IRS Supported (p. 5)
1. The proposed law will establish an outside board to
oversee the IRS and ensure that the rights of taxpayers are protected. It will also establish a taxpayer bill of rights, which will make it easier for
taxpayers to sue the IRS for damages.
2. Passage of the law was prompted by Senate hearings on IRS abuses.
Unemployment Drops to Lowest Level in Decades
(p. 5)
1. Unemployment fell to 4.6 percent last November.
2. The rate of unemployment was the lowest since
1973.
GLENCOE
Census Data Show Rising Income (p. 5)

1. Median income in the United States rose 1.2 percent
in 1996.
2. Despite the increase, the number of people living in
poverty rose by 500,000.
Elections Maintain Status Quo (p. 6)
1. Across the country incumbents won reelection and
ballot measures were defeated.
2. Houston voters approved a ballot measure that
retained affirmative action policies.
Property Crime Falls in United States (p. 6)
1. The rate of property crime in the United States compares favorably with that in other industrial countries.
2. Law enforcement officials believe the decline stems
from improved policing, the drop in size of the
teenage population, greater community involvement, and longer prison terms. Increased use of
burglar alarms may also have contributed to the
decline, and the rise in more lucrative forms of
crime may also be at work.
Supreme Court Hears Cases, Rules on
Broad Range of Issues (p. 7)
1. The government argued that the validity of polygraph evidence is too controversial to allow such
evidence to be admitted in court.
2. The Courts refusal to review the lower courts
finding means that the lower court ruling will
stand. That ruling found that Californias ban on
affirmative action in public hiring, contracting, and
school admission does not violate the Constitution.
SOCIOLOGY
Oldest Remnants of Native American Culture Found
in Louisiana (p. 8)
1. The purpose of the mounds remains a mystery.
2. The finding in Louisiana suggests that early native
Americans in what is now the United States developed independently from the cultures in Mexico
and Central America.
Life Goals Changing Among Young Americans (p. 8)
1. The poll showed that young people are interested in
public service but not in working for the government.
2. Young people place more importance on having a
close-knit family and helping in their communities
than they did in 1989.
ASIA
Jiang Zemin Visits United States (p. 9)
1. China and the United States reached several important commercial agreements. Jiang announced that
China would purchase $3 billion worth of civilian
aircraft from the United States. He also announced
that China would stop helping Iran build nuclear
power stations. Termination of cooperation with
Iran could open the door to up to $60 billion in contracts for American companies.
2. Human rights issues continue to separate the two
countries.
30
Lesotho Crowns King Letsie III (p. 13)

1. Lesotho is a small country surrounded by South
Africa.
2. South Africas President, Nelson Mandela, helped
broker an agreement that created more of a constitutional monarchy in Lesotho.
MIDDLE EAST
Threat of UN Military Intervention Still Hangs Over
Iraq (p. 14)
1. Inspectors were searching for evidence of weapons
of mass destruction.
2. The conflict was resolved after Iraq backed down on
its demand that American members of the United
Nations team be banned from Iraq.
Peace Process Between Israel and the Palestinians
Stagnates (p. 14)
1. Israels prime minister demands that Yasir Arafat, the
Palestinian leader, crack down on terrorism before
Israel turns over more territory in the West Bank.
2. The peace talks were derailed last fall, after
Palestinian suicide bombers killed dozens of Israelis
in two separate incidents.
EUROPE
French Official Tried for Deporting Jews in
World War II (p. 15)
1. Maurice Papon is the highest-ranking French official
to stand trial for war crimes committed during the
Nazi occupation of France. He is charged with
having helped the Nazis send 1,690 French and foreign Jews, including 233 children, to Drancy, a concentration camp in the north of France, during
World War II.
2. The trial has gripped France because it has forced
the country to come to terms with its role during
World War II.
France and Italy Move Toward 35-Hour Workweek
(p. 15)
1. France and Italy reduced the length of the workweek in the hope that the shorter workweek will
increase the demand for workers.
2. Business leaders and opposition leaders claim the
law will reduce the salary base and lead to an
increase in unemployment.
Scotland and Wales Opt for Independent Parliaments
(p. 16)
1. The new legislatures will be responsible for many
domestic issues. The British Parliament will continue
to make decisions regarding foreign affairs, defense,
employment legislation, and social security.
2. British conservatives believe independent parliaments threaten the union of the United Kingdom.
Leaders of Britain and IRA Meet (p. 16)
1. The meeting between Tony Blair and Gerry Adams
was the first between a British prime minister and a
Sinn Fein leader since 1921.
2. The peace talks are being attended by members of
the Ulster Union, which had previously refused to
negotiate with Sinn Fein.
New President of Ireland Elected in Landslide Vote
(p. 16)
1. The new president of Ireland is from Belfast, in
Northern Ireland.
2. Her main goal is to reach out to the North and promote peace there.
GLENCOE
China to Privatize State-Owned Companies (p. 9)

1. China announced that it would privatize 10,000 of
its 13,000 large and medium-sized companies.
2. The personnel shake-up in the Politburo should
allow Jiang Zemin to tighten his control over power.
Two Koreas Agree to Discuss Peace (p. 9)
1. The two Koreas have technically been in a state of
war since the end of the Korean War, in 1953.
2. Recently the two countries agreed to discuss signing
a peace treaty.
India and Pakistan Celebrate 50 Years of
Independence (p. 10)
1. India and Pakistan face enormous social problems.
Almost half of the population in India cannot read,
and more than a third of the population lives
below the poverty line. In Pakistan life expectancy
is only 60, and GNP is just $460 a year.
2. India is a democracy.
Terrorists in Pakistan Attack Americans (p. 11)
1. The recent killings of Americans in Pakistan appear
to have been in retaliation for the conviction of a Pakistani citizen for the murder of two CIA employees.
2. Islamic militants are believed to have been responsible for the crime.
Government Collapses in India (p. 11)
1. New elections were called last December, after the
government of I.K. Gujral fell.
2. Political instability has caused the rupee to fall and
has prevented passage of legislation
Bombing in Sri Lanka Targets Foreigners (p. 11)
1. Tamil rebels are believed to have been responsible
for the bombing.
2. The Tamil tigers seek independence for Sri Lankas
3 million Tamils.
AFRICA
Political Violence Wracks Algeria (p. 12)
1. Political violence began in Algeria in 1991, after the
government canceled elections.
2. The ruling party won 84 percent of municipal races
and 70 percent of regional races.
Tiny Island Secedes from Comoros (p. 12)
1. Anjouan is part of Comoros, a tiny island country
off the east coast of Africa between Mozambique
and Madagascar.
2. Anjouan hopes that recolonization would improve
health, education, and living standards in the
poverty-stricken country.
UN Investigates Charges Against Leaders in the
Democratic Republic of the Congo (p. 13)
1. The United Nations is investigating charges that
troops loyal to Laurent Kabila, the leader of the
Democratic Republic of the Congo, committed mass
murder when he overthrew the government of
Mobutu Sese Seko in 1997.
2. Ethnic conflict between the Hutus and the Tutsis
may have been behind the incident.
Angolan Troops Intervene in Civil War in the Congo
(p. 13)
1. Angola believes that the Congo has supported
rebels in Angola.
2. Jonas Savimibi is the leader of the National Union for
the Total Independence of Angola (UNITA), the rebel
group that waged a civil war in Angola for more
than 20 years.
CANADA
Canada to Preserve Huge Area in British Columbia
(p. 17)
1. The Canadian government will preserve some 10 million acres of land in northeastern British Columbia.
2. British Columbia is in southwestern Canada, just
north of Washington State.
Separatist Spirit Remains Alive in Quebec (p. 17)
1. Many Quebecois would prefer to live in an independent French-speaking country than to live as an
ethnic minority within Canada.
2. The Quebecois hope to hold another referendum on
independence.
LATIN AMERICA
Montserrat Buried in Volcanic Ash (p. 18)
1. Only 4,000 people remain in Montserrat.
2. The volcano has devastated the economy, and there
is almost no hope that it can recover.
Brazilian Stock Market Plunges (p. 18)
1. Stock prices in Brazil fell 27 percent last year.
2. The decline was triggered by the crisis that began in
Asia. Investors have also been worried that the
Brazilian currency, the real, is overvalued.
Pope John Paul II to Visit Cuba (p. 18)
1. The Pope hopes to gain more political liberty and
freedom for Catholics in Cuba.
2. President Fidel Castro hoped the Popes visit would
help generate international opposition to the
embargo on Cuba by the United States.
INTERNATIONAL
Nobel Peace Prize Awarded to Anti-Land Mine
Activist (p. 19)
1. The Ottawa treaty bans land mines.
2. The United States opposes the treaty, because it
believes it needs land mines to maintain stability in
the Korean Peninsula.
El Nio Expected to Disrupt Climate Throughout
World (p. 19)
1. The warmer waters of the Pacific Ocean are known
as El Nio.
2. Rainfall is expected to be abnormally high in California and the southern United States and abnormally
low in the Ohio Valley, the Midwest, and Montana.
Agreement Reached on Reducing Greenhouse
Emissions (p. 20)
1. Under the terms of the Kyoto agreement, the United
States will reduce its emissions by 7 percent, the
European Union will reduce its emissions by 8 percent, and Japan will reduce its emissions by 6 percent below 1990 levels by 20082012.
2.
Global warming causes subtle changes in temperature that can have catastrophic consequences. It can
cause sea level to rise, displacing tens of millions of
people and vastly increasing the number of people
at risk for flooding. It can change the composition of
species in forest and cause entire forests to disappear. It can also change weather patterns, increasing
the chances of destructive weather events.
Foreign Aid Fell in 1996 (p. 20)
1. Aid to developing countries fell 6 percent in 1996.
2. The main source of aid to developing countries is
private, not public, aid.
ECONOMICS
Charting the U.S. Economy (p. 22)
1. Durable goods
2. Industrial production
3. Personal spending
4. Industrial production
5. Housing starts
6. Personal spending
7. Housing starts
Critical Thinking: Industrial production rose, indicating
a growing economy.
Charting the U.S. Economy (p. 23)
1. Personal income rose to $6,941 billion in the third
quarter of 1997.
2. Consumer prices rose by about 2.1 percent in the
third quarter.
3. The third quarter was the strongest for factory
orders.
4. Personal income
5. Consumer prices
6. Factory orders
7. Index of leading indicators
Critical Thinking: Leading indicators give economists an
idea of how the economy is likely to perform in the future.
The index comprises 11 separate indexes, including indexes for building permits, manufacturers new orders, interest rates, and weekly unemployment insurance claims.
NATIONS OF LATIN AMERICA AND THE
CARIBBEAN (p. 27)
1. Brazil
2. Brazil
3. Brazil, Peru
4. Ecuador, Colombia, Brazil
5. Mexico
6. Haiti, Cuba, Nicaragua, El Salvador, Honduras
7. Agricultural (nonmanufactured) products
8. Cold
9. Andes; Colombia, Ecuador, Peru, Bolivia, Chile,
Argentina.

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Economics and the Social Sciences

by Gary E. Clayton, Ph.D.

Visit Glencoes on-line

Contributing Writer: Barbara S. Karni

Woodland Hills, California

SPECIAL REPORT: WORLD STOCK

Stock Markets Around the World Tumble

Copyright by The McGraw-Hill Companies, Inc.

Stock markets from New York to Tokyo tumbled

July: Malaysia July and

Hong Kongs currency has long been pegged to

CURRENT EVENTS UPDATE

SPECIAL REPORT: WORLD STOCK

Markets Rebound Quickly

lapse of stock markets in Asia, which caused stock

Standard and Poors 500 Stock Index

Fed Chairman Sees Silver Lining

CURRENT EVENTS UPDATE

responsible for raising and lowering interest rates in

Copyright by The McGraw-Hill Companies, Inc.

SPECIAL REPORT: WORLD STOCK

1. What happened to currencies in S.E. Asia last year?

Southeast Asian currencies plummeted in value

Copyright by The McGraw-Hill Companies, Inc.

South Korea and Indonesia Receive

the worlds eleventh-largest country will help Korea

Prime Minister Resigns in Thailand

Campaign Finance Defeated by Senate

prosecutor in the case, but would

Top Donors in 1996

American Federation of State,

Association of Trial Lawyers

National Education Association

United Auto Workers

United Food and Commercial

American Medical Association

Health Care Coverage of Children Expanded

CURRENT EVENTS UPDATE

by the change in the welfare law, under which welfare

Copyright by The McGraw-Hill Companies, Inc.

Senate Republicans voted down

Reform of IRS Supported

Reform was proposed following Senate hearings

Unemployment Drops to Lowest Level in Decades

cent over the previous 12 months.

November was 3.8 percent among

Copyright by The McGraw-Hill Companies, Inc.

1. What was the rate of unemployment in the United States last

Census Data Show Rising Income

poorest 20 percent of the population declined by 1.8 percent. The

level in 30 years. The median income of Hispanic households rose

Elections Maintain Status Quo

came the first African-American

In Houston voters chose to retain affirmative action policies,

Burglaries and other forms of

the United States is now equal to

Per 100,00 people

Per 100,00 people

Law enforcement officials believe that the decline stems from

Per 100,00 people

Per 100,00 people

CURRENT EVENTS UPDATE

1. How does the rate of property