Unit 15 Lesson 3: Global Economy

Question 1

Civilizations in the present and past have interacted, but the scale of that interaction has changed. Today, people live in a global economy in which business has become largely transnational. What does that mean

Answer 1

That means it takes place across national boundaries.

Question 2

Supply Chain for Jeans

Answer 2

To make and sell a pair of jeans, cotton is grown, refined, dyed, and woven into fabric. Then the fabric is cut, sewn, labeled, sent to a warehouse, and finally sent to a store. All those steps may take place in different parts of the world. For example, the cotton might be grown in the United States, dyed in India, and woven in China. The fabric then might be cut and sewn in Vietnam. Other people develop advertising for the jeans and work to manage the finances for all the different companies involved. They work in different places, too. It’s a global operation with many moving parts!

Question 2

So how do we know we live in a global economy?

Answer 2

We know we have a global economy because the process of making and exchanging goods travels all over the world. It involves many different people and businesses. Some of the businesses are multinational corporations. They started out in one country but now produce and sell goods in many countries.

Question 2

After World War II, the United States and several other countries wanted to spur economic recovery by lowering barriers to trade. They established the

Answer 2

General Agreement on Tariffs and Trade (GATT).

Question 3

Today trade relations are most often established through

Answer 3

treaties between nations.

Question 4

Trade is a fundamental part of most civilizations. In what sense

Answer 4

Trade is a fundamental part of most civilizations. Countries sell resources that they have and goods that they make in exchange for things that they don’t have or make.

Question 5

So much business and other human activity has become transnational that we’re not just interacting anymore—we’re interdependent:

Answer 5

We depend on one another for resources, goods, workers, information, technology, and more.

Question 6

supply chain

Answer 6

A supply chain is the process by which a product travels from its raw materials to its production and sale.

Question 7

What did the General Agreement on Tariffs and Trade (GATT) do

Answer 7

This agreement required member nations to negotiate further treaties, and over time, it gave rise to the modern free trade agreement. That’s an agreement by countries to trade with each other without setting tariffs (taxes on trade goods) or quotas (limits on the number of trade goods that can be imported).

Question 8

the United States signed the North American Free Trade Agreement (NAFTA) with Canada and Mexico in 1994. What other agreement did US join

Answer 8

In 2004, the nation joined the Central America–Dominican Republic Free Trade Agreement (CAFTA-DR), expanding free trade between the United States and countries in Central America and the Caribbean. By 2017, the United States had free trade agreements with 20 nations across the world. That year, the United States exported more than $1.5 trillion in goods and imported more than $2.3 trillion.

Question 9

What is GATT and how did it spur economic recovery after World War II?

Answer 9

GATT stands for General Agreement on Tariffs and Trade. It is an official agreement that helped lower barriers to trade between the United States and several other countries.

Question 10

What is the purpose of a free trade agreement?

Answer 10

A free trade agreement allows countries to trade with each other without tariffs or quotas. This expands trade between the countries involved.

Question 11

What do NAFTA and CAFTA-DR stand for? Explain how these agreements encourage increased imports and exports for the United States and other countries involved.

Answer 11

NAFTA stands for the North American Free Trade Agreement, which is between Canada, Mexico, and the United States. CAFTA-DR stands for the Central America–Dominican Republic Free Trade Agreement, which is between the United States and countries in Central America and the Caribbean. These agreements encourage imports and exports between all the countries involved because there are no tariffs or taxes and because trade is not limited.

Question 12

Industrialization in the 1800s and early 1900s helped make the United States an economic powerhouse. For decades, the nation thrived as a result of a strong manufacturing base. More recently, however, the nation’s manufacturing sector has declined.

Answer 12

In 2017, manufacturing made up only about 20 percent of the United States’ gross domestic product (GDP), or the nation’s economic activity. Farming made up about 1 percent. Meanwhile, services accounted for a staggering 80 percent

Question 13

services accounted for a staggering 80 percent. What are services?

Answer 13

Services comprise a wide variety of occupations, including health care, education, restaurants, retail, and information technology. The rise in importance of these industries has turned the United States from a manufacturing to a service economy, which focuses more on the buying and selling of services than of goods.

Question 14

1.

In recent decades, leaders of multinational U.S. corporations have increasingly decided that

Answer 14

In recent decades, leaders of multinational U.S. corporations have increasingly decided that operating factories and outsourcing jobs overseas is more cost effective than keeping those factories and jobs in the United States.

Question 15

The ability to purchase goods manufactured outside of the United States has led to an effective drop in salary in the manufacturing jobs that remain, contributing to wage stagnation.

Answer 15

Wage stagnation occurs when the value of wages over time does not keep up with the rate of inflation. When wages remain the same or increase at a rate lower than that of inflation, the buying power of workers’ wages is decreased

Question 16

What do many manufactors do to keep labor costs down in order to compete with the price of imported goods

Answer 16

To keep labor costs down in order to compete with the price of imported goods, many manufacturers have either reduced wages or not increased them at a rate consistent with inflation.

Question 17

After the stock market drop of 2001, the ensuing recession triggered the loss of millions of manufacturing jobs in the United States. What happened to the manufacotring jobs when the econmy recovered the following year

Answer 17

When the economy began to stabilize in 2002, few manufacturing jobs returned. Instead many of the jobs were outsourced, or moved, to China and India, or other countries.

Question 18

Pros of Outsourcing

Answer 18

• access to a larger, global talent pool
• lower labor cost
• allows more flexibility to increase or decrease staff based on needs

Question 19

What advantages does e-commerce offer consumers?

Answer 19

They can gather more information on goods and prices to make the best buying decision. They can shop anytime from the comfort of their home or on their smartphone. They have a greater variety of choices online than in a traditional store.

Question 19

Cons of Outsourcing

Answer 19

• limits control over the outside workforce and can result in quality and consistency issues
• communication issues can be challenging due to different languages or time zones
• public perception that outsourcing takes away jobs from Americans

Question 20

E-commerce

Answer 20

E-commerce is a term used to define electronic buying and selling.

Question 21

Look at the increase in e-commerce sales over time. What effect do you think that increase has on brick-and-mortar shops?

Answer 21

I think the rise in e-commerce has probably hurt some brick-and-mortar businesses by taking sales away from them.

Question 22

What do Regulatory groups do

Answer 22

Regulatory groups make rules for how countries and businesses conduct trade.

Question 23

In 1994, 128 nations signed a trade agreement forming the World Trade Organization (WTO). What does WTO do

Answer 23

In 1994, 128 nations signed a trade agreement forming the World Trade Organization (WTO) to set rules for trade and to help members mediate, or resolve, disagreements. The treaty took force on January 1, 1995, supplanting GATT.

Question 24

Other international bodies also strengthen economic ties among nations. What does the United Nations do

Answer 24

The United Nations (UN) serves as a forum for countries to come together to discuss many world issues, including economic concerns.

Question 24

European Union (EU)

Answer 24

The EU itself evolved out of an economic agreement among European nations and provides for free trade among its 28 members.

Question 25

Roles of the World Bank and International Monetary Fund

Answer 25

The World Bank and International Monetary Fund are UN organizations designed to provide economic aid to countries in need through investments, loans, and direct assistance.

Question 26

Write a short paragraph explaining the purpose and goals of this group.

Answer 26

The Group of Twenty includes 19 of the world’s largest economies and the EU. Member nations include the United States, the United Kingdom, Canada, France, Germany, Italy, Japan, Russia, Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Saudi Arabia, South Africa, South Korea, and Turkey. Each year, financial officials from these nations meet to discuss economic and political issues, such as trade, assistance, and long-term growth. They focus heavily on economics—particularly on global trade, debt, and financial needs, such as refugee crises

Question 27

What do many national and international nongovernmental organizations (NGOs) do

Answer 27

Many national and international nongovernmental organizations (NGOs) work to provide direct monetary, food, and health aid to people around the world.

Question 28

How do NGOs work

Answer 28

These NGOs are private and funded largely by donations. They are not led by government officials.

Question 29

You probably know of many local groups that help people in need in your community. Some of those, such as a neighborhood YMCA, are

Answer 29

NGOs

Question 30

Other NGOs are much larger and, like big corporations, have become transnational. They work in countries all over the world. Examples of transnational NGOs include the

Answer 30

International Committee of the Red Cross, Doctors Without Borders, and Save the Children.

Question 31

How do the efforts of USAID and its NGO partners show the interdependence of the global economy?

Answer 31

USAID and partner NGOs work on a variety of issues, ranging from economic development to human rights protections. They help provide medical care, protect people from violence, and manage and provide disaster recovery assistance. Some help invest in new business ventures to spur economic growth. USAID is an organization dedicated to providing aid to other countries, and it partners with local and international NGOs all over the world. That relationship shows how people and countries around the world are interconnected and depend on one another in the global economy.

Question 32

Mass media

Answer 32

Mass media refers to any means of widespread communication, such as newspapers, magazines, radio broadcasts, television programs, and websites aimed at spreading news and information.

Question 33

# 1. Social media

Answer 33

Social media refers to online forums in which individual users create and share a wide variety of content, ranging from personal information to political views.