Chapter 1 Flashcards
(23 cards)
What is globalization?
A shift toward a more integrated and interdependent world
economy.
What is the globalization of markets?
The merging of historically distinct and separate national markets
into one huge global marketplace. (McDonalds)
What is the globalization of production?
Sourcing of goods and services from locations around the globe
to take advantage of national differences in the cost and quality
of factors of production
What do global institutions do?
Manage, regulate, and police the global marketplace.
What is the WTO?
World Trade Organization
What does the WTO do?
Polices world trading system and ensures nation-states
adhere to the rules established in WTO treaties
What is the GATT?
General Agreement on Tariffs and Trade
What is the IMF?
International Monetary Fund
What does the IMF do?
- Maintains order in the international monetary system.
- Lender of last resort.
- Requires nation-states to adopt specific economic policies
in return for loans.
What does the World Bank do?
- Promotes development using low-interest loans.
- Seen as less controversial than IMF.
What is the UN?
United Nations
What does the UN do?
Committed to maintaining international peace and security on
basis of UN Charter
What is the G20?
Group of Twenty
What does the G20 do?
- Comprised of finance ministers and central bank governors of
the 19 largest world economies plus the EU and European
Central Bank. - Became a forum for a coordinated policy response to the financial crisis of 2008 and 2009
What are the drivers of globalization?
- Decline in barriers
- Technological change
What is international trade?
When a firm exports goods or services
to consumers in another country
What is a foreign direct investment?
When a firm invests
resources in business activities outside its home country.
What is Moore’s law?
As the costs of microprocessors fall, their power increases.
How has transportation affected globalization?
Lower transportation costs make geographically dispersed production systems more economical; and allow firms to better respond to demand shifts.
What is a multinational empire?
Any business that has productive activities in two or more countries
What are the arguments for globalization?
It can promote the economy and give jobs to people in low-income countries
What are the arguments against globalization?
It can take jobs from native citizens and can influence underpaying those in low-income communities
