Chapter One: International Economy & Globalization

Question 1

What is Economic Interdependence?

Answer 1

No nation exists in isolation, all aspects of a nation’s economy are linked to international partners

It is complex, and its effects are uneven

A high degree of economic interdependence reflects:
- Historical evolution of economic and political orders
- Increasing integration into activities of foreign countries

Question 2

How has the World’s economies become increasingly interdependent?

Answer 2

Due to globalization, we can see an increase in many things including productivity increasing fast, living standards, technological development and innovation, liberalization of trade and investment, development of international financial investments, and more

Question 3

What is the importance of international trade for the U.S. economy?

Answer 3

Lowers costs for consumers, increases productivity, and creates jobs

Question 4

What is international competitiveness?

Answer 4

International competitiveness is a dynamic concept that requires continuous adaptation to global economic trends through innovation, policy reforms, infrastructure development, and human capital investment.

If it is not accomplished, then the company can be replaced.

Question 5

What are the benefits to Globalization?

Answer 5

-Productivity increases faster when they have a comparative advantage
-Living standards increase
-Global competition and cheap imports help combat inflation
-Unfettered capital movements provide the U.S. access to foreign investment and maintain low interest rates

Question 6

What are the disadvantages to Globalization?

Answer 6

-Fear of layoffs
-Wage concessions
-Loss of jobs and when they get new jobs those jobs often pay less