1. Intro Slide

Question 1

Name the general dates for the first and second waves of globalization.

Answer 1

Second wave of globalization began approximatly in the 1950s, when world trade grew steadily in dollar terms and as a ratio to GDP.

Question 2

What is the “spirit” of globalization? and how is it divided?

Answer 2

It is the Political and Institutional Basis for Globalization, and it includes practices and mechanisms such as: peace; legal (property rights, contract enforcement); trade policy (tariffs, quotas, etc.); and stable currency. It is divided into “strong” and “weak” eras.

Question 3

What is the “flesh” of globalization and how is it divided?

Answer 3

The flesh is the economic and technological basis for Globalization and it includes mechanisms and policies such as: transport costs; finance & banking; comparative advantage; economies of scale; and product variety. It is divided between weak and strong eras.

Question 4

Describe trade of the Classical to Medieval Era (up to 15th C)

Answer 4

International trade was very limited due to:

• High transportation costs, risky travel, pre-industrial production, technology, subsistence agriculture.
• Prohibitive policies.

Question 5

Describe Early Modern Era trade (16th - 18th C)

Answer 5

International trade began to increase under state sponsorship:

• Exploration
• Colonization
• Merchant-Adventurer trading companies (Hudson’s Bay, Dutch East India, etc.)

Question 6

Describe the progress of international trade during the two World Wars and the Great Depression.

Answer 6

International trade and investment collapses under the weight of the two World Wars and the Great Depresion

Question 7

Describe interwar trade policy during the two World Wars.

Answer 7

• The Smoot-Hawley Tariff Act was signed into law in June 1930, raising the tariffs to as high as 60% on many categories of imports.
• Thses tariffs were applied by the US to protect farmers and other industries, but they backfired by causing other countries to retaliate.

Question 8

Why did the Smoot-Hawley Tariff fail?

Answer 8

As the US raised its tariffs, so did other countries in retaliation, resuting in a dramatic increase in tariffs all over the world.

Question 9

What were some of the causes of the 2nd wave of Globalization? Also, when did the 2nd wave begin?

Answer 9

The end of WWII paved the way for a second wave of globalization along with the creation of multilateral institutions (e.g. GATT/WTO) and lower transportation costs (air travel, container shipping, information technology).

Question 10

Define the Pattern of Trade:

Answer 10

• What goods and services a country trades, with whom, and in what direction
• What gets traded?
  
  • Which goods are traded the most?
  • Which countries trade which goods?

Question 11

Today, what percentage of the volume of trade is in manufactured products? lists examples.

Answer 11

Today about 55% of the volume of trade is in manufacutured products such as automobiles, computers, clothing, and machinery. Services such as shipping, insurance, legal fees, and spending by tourists account for about 20% of the volume of trade. Mineral products (petroleum, coal, copper) and agricultural products are relatively small part of trade.

Question 12

What were the main differences between the two waves of globalization.

Answer 12

• The growth of trade and investment in the second wave exceeded that of the first.
• The coposition of trade also changed:
  
  • First wave: agricultural goods and raw materials from South traded for manufactures (capital and consumer goods) from the North.
  • Second wave: Two-way trade in manufactures; fragmentation of production; rise of trade in service.

Question 13

How has trade changed in deveolping countries? Include dates.

Answer 13

Question 14

In 1910, Britain mainly imported 1. _______ and 2. _________ products, while 3. _______ products represented most of the volume of exports

Answer 14

1. Agricultural
2. Mineral
3. Manufactured

Question 15

In 1910, the US mainly imported and exported 1. __________ and 2. _________ products.

Answer 15

1. Agricultural
2. Mineral

Question 16

In 2002, __________ products made up most of the volume of imports and exports for both Britian and the US.

Answer 16

Manufactured products

Question 17

In 2001, about 65% of exports from low- and middle-income countries were ________products, and only 10% of exports were ____________ products.

Answer 17

1. Manufactured
2. Agricultural

Question 18

In 1960, about 58% of exports from low- and middle-income countries were 1. ________ products and only 12% of exports were 2._________ manufactured products.

Answer 18

1. Agricultural
2. Manufactured

Question 19

What are the top ten US imports in 2008?

Answer 19

Question 20

What are the top ten US exports in 2008?

Answer 20

Question 21

Define production fragmentation

Answer 21

Dividing up the “value-chain” of production among plants in different locations.

Question 22

Define multinaitonal firms

Answer 22

Firms that own plants in different countries

Question 23

Define outsourcing

Answer 23

Occurs when some part of the production process is done outside the firm (can be international or domestic).

Question 24

Define Offshoring

Answer 24

Occurs when some part of the production proces is done in a different country (can be inside or outside the firm)

Question 25

Technology/knowledge transfer

Answer 25

Supplying technology or design specifications to a supplier.

Question 26

In most countries, the majority of output is in the form of _______

Answer 26

Services

Question 27

In advanced countries more than ______% of employment is in services.

Answer 27

80%

Question 28

Most services are nontradable because they _______________.

Answer 28

Because hte need to be done close to the customer

Question 29

1. _________ is in fact the largest exporter of services, and exports 2. __________ than it imports.

Answer 29

1. The US
2. Much more than it imports