Globalization

Question 1

Globalization

Answer 1

refers to the increasing movement of goods, services, and capital across national boarders
-1/5 of all goods and services produced worldwide is sold to other nations

Question 2

Competing in the Global Market

Answer 2

1.) Develop global market channels
-first build a successful business in home country, then export products or services to buyers in other countries
2.) Establish global operations
-locate manufacturing plants or service operations in other countries as a way to cut costs
3.) Develop global supply chains
-Purchase raw materials, components, or other supplies from sellers in other countries; work may also be subcontracted

Question 3

Benefits of Globalization

Answer 3

-reduces cost and price for consumers
-increases economic productivity-provides access to FDI
-levels playing field
-Helps in transfer of technology, ideas and innovation

Question 4

Negatives of Globalization

Answer 4

-causes job insecurity
-prevents individual nations from adopting policies that serve specific interests, if these discriminate against products from another country
-weakens environmental and labor standards

Question 5

The world bank

Answer 5

-established in 1944, the WB provides economic development leans to its member nations
-funds used mainly for roads, dams, power plants, pipelines, and other infrastructure projects
-funding provided by member countries and international capital markets
-negotiates “structural adjustment plans” with countries it loans to: applies conditions on these countries, conditions are considered by critics to lead to unfair burden on developing countries

Question 6

International Monetary Fund

Answer 6

-sister org. to the world bank, created at the same time
-purpose is to make currency exchange easier for member countries so that they can participate in global trade
-lends foreign e- finish slide later

Question 7

World trade organization

Answer 7

-founded in 1995, successor to General Agreement on Tariffs and Trade (GATT)
-international body that establishes ground rules for trade among nations
-its major objective is to promote free trade; attempts to eliminate barriers to trade (quotas, duties and tariffs)
-“Most Favored Nation Rule”

Question 8

Most Favored Nation Rule

Answer 8

-means member countries cannot discriminate against foreign products for any reason