Chapter 2: The Global Economy

Question 1

_____ is the word used to describe the growing interdependence of the world’s economies, cultures, and populations.

Answer 1

Globalization

Question 2

Global Economy’s Characteristics/ Aspects of Global Economy

Answer 2

• Globalization
• International trade
• International finance
• Global investment

Question 3

____ describes a process by which national and regional economies, societies, and cultures have become integrated.

Answer 3

Globalization

Question 4

it refers to the exchange of goods and services between different countries

it’s an economic theory that refers to an economy’s ability to produce goods and services

Answer 4

international trade

Question 5

it consists of topics like currency exchange rates and monetary policy

Answer 5

international finance

Question 6

it refers to an investment strategy that is not constrained by geographical boundaries

Answer 6

global investment

Question 7

we can understand the importance of global economy by looking at it in relation to ___.

_ one of the primary engines of world economic growth.

same answer

Answer 7

emerging markets

Question 8

it refers to the study of the behavior of households, individuals, and firms with respect to the allocation of resources and decision-making.

Answer 8

concept of microeconomics

Question 9

a branch of economics that studies how people make decisions, what factors affect their decision, and how this decision affect the price, demand, and supply of goods in the market.

Answer 9

microeconomics

Question 10

GDP in emerging market economies in 2019 are likely to keep ____ at a _____ rate.

Answer 10

increasing at a positive rate

Question 11

Who controls the global economy?

Answer 11

Big banks and large corporations

Question 12

Global economy is dominated by _____

Answer 12

large financial institutions

Question 13

is an american multinational investment bank and financial services company, founded in 1869.

is the second largest investment bank in the world by revenue and its ranked 55th on the Fortune 500 list

Answer 13

The Goldman Sachs Group Inc.

Question 14

________ is an American multinational financial services firm headquartered in New York and Incorporated in Delaware. It is the largest bank in the United States and the world’s largest bank by market capitalization.

Answer 14

JP Morgan Chase & Co.

Question 15

________ traces its roots to J.P Morgan & Co. following the Glass-Steagall Act. It was no longer possible for a corporation to have investment banking and commercial banking businesses under a single holding entity.

Answer 15

Morgan Stanley

Question 16

The functioning of the global economy can be explained through one word. These mainly comprise trade taking place between different countries.

Answer 16

Transaction

Question 17

________ taking place between top economies in the world help in the continuance of the global economy.

Answer 17

International Transaction

Question 18

________ includes the exchange of a variety of products between countries. It ranges all the way from fruits and foods, to natural oil and weapons.

Answer 18

International Trade

Question 19

____ was referendum decision for the United Kingdom to widraw from the European Union (EU).

Answer 19

Brexit

Question 20

The main cause of the effects of Global Economy is economics - based on the ________________. Restrictions on the ________________ can potentially hamper economic stability of countries who choose to impose too many.

Answer 20

• Production and Exchange of Goods and Services
• Import and Export of Goods and Services

Question 21

International trade differs from domestic trade in two aspects:

1. The ____ of the two countries are involved in international trade, so they must be exchanged before goods and services can be exported or imported
2. Occasionally, countries enforce ________ on the international trade of certain goods or services which can disrupt the relation betweem two countries

Answer 21

1. Currencies
2. Barriers

Question 22

________ refers to the proportionate saving in costs gained by and increase level of production.

Answer 22

Economies of Scale

Question 23

Occasionally countries add barriers to international trade. Some of these barriers include ________ (taxes and imports) and ________ (limitation on the number of products that can be imported into a country).

Answer 23

• trade tariffs
• trade quotas

Question 24

What are the benefits of global economy (4)

Answer 24

1. Free trade
2. Movement of Labor
3. Increased economies of scale
4. Increased investment

Question 25

____ is an excellent method for countries to exchange goods and services. It also allows countries to specialize in the production of those goods in which they have a comparative advantage.

Answer 25

Free Trade

Question 26

Increased migration of the labor force is advantageous for the recipient country as well as for the workers. This also helps in reducing geographical inequality.

Answer 26

Movement of labor

Question 27

________: Due to presence of global economy, it has become easier for countries to attract short-term and long-term investment.

Answer 27

Increased Investment

Question 28

Key factors that influence and affect how well the global economy works

Answer 28

1. Natural Resources
2. Infrastructure
3. Population
4. Labor
5. Human Capital
6. Technology
7. Law

Question 29

the ____ refers to the interconnected worldwide economic activities that take place between multiple countries.

Answer 29

global economy