Unit 2: Global Economy Flashcards
The 3 ways as to how our products can be found in other countries and vice versa
- Accumulation
- Exportation
- Importation
Refers to the increasing interdependence of world economies as a result of the growing scale of cross-border trades and the rapid spread of technologies
Economic Globalization
(Shanquan, 2000)
The 4 interconnected dimensions of economic globalization
- goods & services
- capital
- communication & technology
- market exchange
Refers to government policies that restrict international trade by imposing tariffs, quotas, product standards, and subsidies
Protectionism
The 2 reasons for the implementation of strict policies
- To improve domestic economy by forcing citizens to purchase local products
- For safety and quality concerns of both imported and exported products
A kind of tariff that lessens the number of products that can be imported for a certain period of time
Import Quotas
Using these, we can determine if our imported product are consumable
Product Standards
Refers to additional charges for imported goods
Tariffs
A strategy of the national government by which incentives are given to domestic businesses to encourage expansion globally through export
Government Subsidies
The 3 advantages of protectionism
- Taxes on exporting countries may increase government revenue
- Strict and rigid policies may protect domestic products
- Encourages exportation of national products
The disadvantage of protectionism
- Other countries may make their own protection policies, limiting exportation of both countries
The process of removing or reducing the barriers or restrictions on the exchange of goods between and among nations
Trade Liberalization
The 7 advantages of trade liberalization
- Export costs lessened
- Efficient resource use and allocation
- Increased capital flow
- Allows third world countries access to heavily protected markets
- Produce goods or services
- Higher efficiency of producers
- Attracts foreign investment
The 6 disadvantages of trade liberalization
- Affects local businesses
- Imports may have lower environmental standards
- Developing nations forced to compete with other nations
- Countries with lower education may struggle to adapt
- Exploits natural resources
- Leads to structured unemployment
The 5 main actors of economic globalization
- Consumer
- Laborers
- Regulatory Institutions
- State
- Multinational Companies
