INB 3332 Ch. 1

Economic interdependence occurs through:

1) trade 2) labor migration 3) capital (investment) flows

Volume of world trade has increased by more than _______ since 1947.

2000%

Global production sharing accounts for about ______ percent of the world trade in manufactured goods.

30

Where companies link and cluster together (ex: japanese auto companies insisted their parts come from manufacturers within short distance)

agglomeration economies

Where firms increasingly cluster together and produce the same product, connected by vertical linkages

agglomeration economies

Why is the level of world economic integration higher today than it has ever been in history?

because of declining transportation costs and declining communication costs

The idea that national economic policies cannot be formulated without evaluating their probably impacts on the economies of other countries

economic interdependence

Which wave of interdependence (globalization) was sparked by a decrease in tariff barriers and new technologies that resulted in declining transportation costs?

first wave of globalization (1870-1914)

The process of greater interdependence among countries and their citizens

globalization

What consists of the increased interaction of product and resource markets across nations via trade, immigration, and foreign investment

globalization

Globalization has also been promoted through the widespread liberalization of ______ ______ and the development of international financial markets.

investment transactions

The citizens of each nation can gain by spending more of their time and resources doing those things in which they have a relative advantage

law of comparative advantage

A rough measure of the importance of international trade by looking at the nation's exports and imports as a percentage of its gross domestic product (GDP): (exports + imports)/GDP

openness

The second wave of globalization introduced what kind of trade?

rich country specialization (in manufacturing niches that gained productivity through agglomeration economies)

Which wave of globalization has falling transportation costs continue to foster increased trade and nations persuading governments to cooperate to decrease previously established trade barriers?

second wave of globalization (1945-1980)

What forces are driving globalization?

technology

The first wave of globalization was brought to an end by:

world war I (the depression too)