Chapter 1

First web browser was introduced in

1994

Critics of globalization protest in order to

diminish the impact of the culture of multinational enterprises on the world

factors of production

land, labor, capital, and energy

Moore's Law

predicts that computer power will approximately double every 2 years

globalization

refers to the shift towards economic international integration

global institutions are needed to

stabilize and monitor the global marketplace

globalization of markets

the merging of national markets into one large global place

Group of Twenty (G-20)

comprises the finance ministers and central bank governors of the 19 largest economies in the world, plus representatives from the EU and the European Central Bank

How did nation-states react to the economic environment of the 1920s and 1930s?

trade barriers were increased

A critic of globalization would say that falling trade barriers result in what situations?

-Depression of wages in developed nations. -Destruction of manufacturing jobs in advanced economies

Demographics of the global economy up until the 1960s

-roughly half of the globe was off limits to Western international business -US dominance in world foreign direct investment -US dominance in the world economy and world trade -Dominance of large, multinational US firms in international business scene

globalization of production

locating each stage of production where it can be down most economically

When NAFTA was first introduced, what was the biggest argument opponents presented?

U.S. firms would move manufacturing to Mexico and feel free to pollute the air and employ child labor

examples of global institutions

International Monetary Fund and World Bank

The WTO is the successor to ___________?

GATT

Which statement is true about the International Monetary Fund (IMF)?

The IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil

When global institutions were introduced in the 1940s, governments in struggling nations would turn to the _____ for low-interest loans needed for infrastructure projects such as building roads.

World Bank

International Monetary Fund

a United Nations agency to promote trade by increasing the exchange stability of the major currencies and maintain order in the international monetary system

Foreign direct investment occurs when

a firm invests resources in business activities outside its home country

multinational enterprise

an entity that conducts business in at least two countries

Example of foreign direct investment

A United States-based shoe company has decided to invest in a British company that specializes in clasps and buckles

The opponents of globalization argue that falling barriers to international trade will

eliminate manufacturing jobs in wealthy economies.

microprocessor

enables the explosive growth of high-power, low-cost computing, vastly increasing the amount of info that can be processed

The Johnson Automotive Group recently closed two of its US manufacturing facilities and opened a new facility in Asia to take advantage of lower labor costs and savings in energy costs. The company made this change in order to benefit from____________________?

factors of production

World Bank

focuses on helping developing countries to fight poverty through investments in the underlying structure of the country

Uruguay Round

further reduced trade barriers; extended GATT to cover services as well as manufactured goods; provided enhanced protection for patents, trademarks, and copyrights; and established the WTO to police the international trading system

The decline of the United States standing in industrial power since the 1960s, is considered a relative decline because it is a reflection of

the faster economic growth of other economies