Economic Globalization Flashcards
What is economic globalization?
Increasing interdependence of world economies as a result of growing scale of cross border trade of commodities and services, flow of international capital (money) and wide and rapid spread of technology
The business cycle
A: repressing a a decline (sometimes called a recession if burst) B: Recession C: Represents a boom (sometimes called prosperity) D: Depression E: Recovery
European Empire
Controlled great wealth, territories(colonies) and lives of millions
Imperial powers wanted to protect or expand their colonies and trade
- colonies were still needed as a source of raw materials and a market for goods manufactured in the mother countries
Other factors like competition leading to WWI
Eventually other countries of the imperial powers were drawn into the conflict
The cost of world war 1
About 15 mil soldiers and civilians were killed during WWI
-Canada alone lost more that 660,000
Early in the war people expected a quick victory
- instead soldiers spent years in France living in trenches under threat of attack
Economic costs of the war were high
- European cities, towns, roads and railways were destroyed
Government et had borrowed heavily from U.S. Owed more than $7 bil
Economies were devastated
After the war, countries restricted international trade while they tried to rebuild their countries and economies
The cost of peace
The treaty of Versailles ended WWI and was to ensure peace and prevent another global war
Who are the big three?
David Lloyd George representing Britain
George’s Clemenceau representing
France
Woodrow Wilson representing the USA
What are the big three?
Leaders of victorious countries after World War One. Came together to make a decision about what what land would be divided and country would be conquered
Reparations
Affirmative action, individual payments, settlements
What did negotiation at the peace conference cause?
imposed harsh conditions on Germany in the form of reparations(payments for war damages)
The Weimar Republic: how did it pay for the reparations?
Time before hitler took over. For the most part the didn’t, but at the time they used gold
John Maynard Keynes
British economist known for developing theories
Argued that falling wages resulted in decreased spending
Believed that direct government intervention in the economy was necessary to increase total spending and prevent or lift economy out of recession
Arguments form the basis of the rationale for government spending and taxation to stabilize the economy
What was the economic boom
- Unemployment was low and stock exchanges prices were rising
- Investors were confident that the prices of stocks would keep increasing and they would be able to sell their shares at a profit
What happened on Black Tuesday
Some worried investors started selling their stocked
- this started a panic and share prices plummeted
- the downward slide turned into a crash
The crash started a chain of reaction:
- People who lost money could no longer pay their bills
- Thos who borrowed money could no longer pay their bills
- Those who were owed money could not collect
People had less money to spend on consumer goods which reduced demand, so?
- companies laid off workers and many closer their doors for good
- unemployment rose reducing demand even more causing more cuts to production and more people laid off
