GLOBAL-ECONOMY-CONTEMPORARY-GLOBALIZATION.pptx

Global economy

1. CHAPTER II INTRODUCTION OF GLOBAL ECONOMY

2. POVERTY IN GLOBAL ECONOMY Refers to the condition where individuals or communities lack of financial resources and means to meet basic needs such as food, clean water, shelter and education. CONNECTION OF GLOBAL ECONOMY 1. Economic Growth- high poverty level can stifle economic growth. 2. Inequality - poverty contributes to and exacerbates global inequalities 3. Global Trade - Poor countries often struggle to engage in international trade limiting their economic opportunities. 4. Social Stability and Conflict -widespide poverty can lead to socil unrest.

3. GLOBAL ECONOMY Also referred to as “ world economy” Refers to the international exchanges of goods and services. It may also mean as the free movement pf goods, capital, Services, technology and information. It is concerned with globalization of production, finance, markets, technology, organizational regimes, institutions, corporations and labor. It is expanding since the emergence of trams-national trade and increase rate of communication and technology.

4. GLOBAL ECONOMY The increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, the flow of international capital wide and rapid spread of technologies. The creation of the world trade organizations made countries cut down trade barriers and open up their current accounts and capital accounts.

5. FORMS OF ECONOMY • Protectionism - rotecting one's economy from foreign competition by creating trade barriers • Quota - is a limit quantity coming into a country. • Tariff - required fees on import/export goods Trade Liberalization - acts of reducing to make international trades easier between countries • Free Trade - trading of goods and services between two or more Countries without tariffs and taxes. • Trade Bloc - Agreement made by government to reduce or eliminate trade barriers. - Ex. NAFTA Outsourcing - manufacturing jobs transfer from developed nations to developing nation to reduce the costs of products.

6. F ACTORS THAT FACILITATE ECONOMIC GLOBALIZATION 1. Technological Advancement and IT Development - the advancement of technologies has greatly reduces the cost of transportation and communication, making economic globalization possible. 2. Multinational Corporations -are well known for being the main forces behind global globalization 3. International Trade - enhances efficiency by allocating resources to increase the amount produced for a given level of effort

7. WORLD TRADE ORGANIZATI ON -is the only global international organization that dealing with the rules of trade between nations Importance of W orld T rade O rganization ( WTO) t o G lobal E conomy - promotes free trade by reducing trade barriers such as tariffs, quotas, and subsidies -provides a forum for membercountries to negotiate and resolve trade disputes. -monitors national trade policies to ensure compliance with it's agreements -provides training and technical assistant to help developing countries implement of(WTO) -cooperates with other international organization to promote sustainable development and environmental protection through its trade related agreements

8. T ARIFF TAX Is a tax imposed by one country pm goods and services imported from another country to influencesit raise revenues or protect competitive advantage. PRIMARY PURPOSES OF TARIFFS -Influence Trade -Raise Revenues -Protect Domestic Industries

9. IMPORTANCE OF TARIFF TAX Protection of Domestic Industries - are often implemented to safeguard domestic industries from foreign competition by making imported goods expensive, tariffs encourage consumers to fource domestically produced alternatives local business and employment. Revenue Generation -significant source of government revenue especially before the introduction of income taxes. Consumer Protection - can serve to protect domestic consumers from potentially harmful or substandard imported goods.

10. ROLE OF THE INTERNATIONAL FINANCIAL INSTITUTIONS IN THE CREATION OF GLOBAL ECONOMY INTERNATIONAL FINANCIAL INSTITUTIONS (IFI) -Are chartered by more than one county and therefore are subjects to the international law. -The owners or shareholders are generally national govenment, although other international Institutions and other organizations occasionaly figure as shareholder.

11. THE INTERNATIONAL FINANCIAL INSTITUTIONS (IFIs) are: A. International Monetary Fund( IMF) B. Multilateral Development Banks (MDBs) which include : a. World Bank Group b. African Development Bank c. Asian-Development Bank d. Inter-American Development Bank e. European Bank for Reconstruction and Development

12. MARKET INTEGRATION Prices among different location or related goods follow the same pattern over a long period of time When a group of prices often move proportionally to each other An indicator how much different markets are related to each other

13. GLOBAL CORPORATIONS A global business connects its talents resources and opportunities across global boundaries. An international company is one that has a head quarters, for example in the united states but also does business overseas and might have a large presence in multiple areas.Such company would be governed by U.S regulations assuming its head quarters remain in the U.S but also have foreign subsidiary which is governed by local laws.

14. GLOBAL CORPORATIONS I s one that operates in more than one country. • Michael Porter at Harvard University, defined global businesses as one that maintains a strong head quarters in one country, but it has investment in multiple foreign locations so the head quarters is it's home country. • Global Corporations strive to create economies of scale by selling the same products in multiple locations and limiting local customization . • Global corporations are governed by the laws of the country where they are incorporated.