Week 3: Lectures 5 and 6 - Globalization

Question 1

Define globalization

Answer 1

Globalization refers to economic interdependence among countries, with increasing flows of goods and services and flows of factors such as capital and labour

Question 2

Give a brief summary of the history of globalization

Answer 2

• The first wave of globalization occurred from the 19th century to 1914 and included steamships, trains, economies of scale and refrigerated cargo ships
• The second and third waves of globalization occurred after the world wars and included air travel and trade deals

Question 3

Give some examples of global trade agreements

Answer 3

• General agreement on tariffs and trade (GATT) formed in 1947
• World Trade Organization (WTO):
  1- Established in 1995
  2- 164 members since July 2016
  3- It oversees trade negotiations, implementation and monitoring of policies, dispute settlement and building trade capacity

Question 4

Give some examples of Regional Trade Agreements

Answer 4

• Regional Comprehensive Economic Partnership (RCEP) with 15 members in Asia and Australasia
• Trans-Pacific Partnership (TPP)
• North American Free Trade Agreement (NAFTA)
• European Union

Question 5

What are the two production processes?

Answer 5

• The spider: The spider is a production process where separate parts are assembled into the final good
• The snake: The snake is a production process where the product moves through a vertical production process with value being added as a sequence of operations are performed