3. Economic Globalization Flashcards
__ refers to the international mobility of individuals, capital, technology, goods, and services. It’s also about how different countries and regions have become __ across the globe
- economic globalization
- interdependent
__ refers to the increasing ____ around the world particularly through the movement of goods, services, and capital across borders.
- economic globalization
- integration of economies
The accumulation, importation, and exportation of goods and commodities from one country to other countries and vice-versa is best explained by the economic globalization.
global economy
CHARACTERISTICS OF GLOBAL ECONOMY
- International trade
- International finance
- Global investment
How does the global economy work?
International transactions
What are the benefits of the global economy?
- free trade
- increased investment
- increased economies of scale
- movement of labor
an excellent method for countries to exchange goods and services
free trade
due to the presence of the global economy, it has become easier for countries to attract short-term and long-term investment
increased investments
the specialization of goods production in most countries has led to advantageous economic factors such as lower average costs and lower prices for customers
increased economies of scale
increased migration of the labor force is advantageous for the recipient country as well as for the workers
movement of labor
Factors Affecting Global Economy
population:
- human capital
- natural resources
infrastructure:
- technology
- law
a term that is used to identify a phenomenon in which markets of goods and services that are somehow related to one another being to experience similar patterns of increase or decrease in terms of the prices of those products.
market integration
Effect of Integration on Market Development
- Market integration provides opportunity to expand market coverage by selling local products in the global market.
When the __ sneezes, the rest of the __ catches a cold.
- American economy
- world
International non-profit agencies are one of the major sources of financing like regional development banks or banks globally.
International Financial Institutions
To finance productive development projects or to promote economic development.
International Financial Institutions
It provides much of the planning and financing for economic development projects involving billions of dollars
World Bank
lends money to members having trouble meeting financial obligations to other members, but only on the condition that they undertake economic reforms.
International Monetary Fund (IMF)
intended to boost economic recovery after World War II through reconstructing and liberalizing global trade.
General Agreement on Tariffs and Trade (GATT)
a global membership group that promotes and manages free trade.
World Trade Organization
generally referred to as a multinational corporation (MNC), transnational corporation (TNC), or international company.
global corporation
An enterprise that engages in activities that add value (manufacturing, extraction, services, marketing, etc) in more than one country
(United Nations Centre On Transnational Corporations, 1991)
global corporation
comprise businesses operating or having business interests in more than one country, mostly headquartered in the parent country.
multinational corporations
Multinational companies (MNCs) can bring various benefits to both their __ (where they are headquartered) and __ (where they operate subsidiaries or branches).
- home country
- host countries
“any enterprise that undertakes foreign direct investment, owns or controls income-gathering assets in more than one country, produces goods or services outside its country of origin, or engages in international production”
transnational corporation (TNC)
refers to a corporation that has assets and facilities in one or more countries, other than the home country, and has a centralized office where global management is coordinated
multinational corporations
refers to a corporation that operates in other countries, other than the home country, and does not have a centralized management system
transnational corporations
have subsidiaries in other countries
multinational corporations
does not have subsidiaries in other countries
transnational corporations
decision-making is made in the mother country and should be effected in all the subsidiaries globally
multinational corporations
decision-making is made by individual ** corporations.
transnational corporations
faces restrictions when it comes to local markets since they have centralized management systems
multinational corporations
are free to make decisions independently based on local markets
transnational corporations
examples of TNCs
- Royal Dutch Shell
examples of MNCs
- Toyota Motor Corporation
- Unilever
