Understanding Globalization's Impact on the Economy
Globalization is the increasing unification of the world's economy, leading to greater interconnectedness and interdependence among nations. It has facilitated the exchange of products, services, and ideas globally, impacting economies worldwide. While it offers benefits such as increased productivity, innovation, and access to foreign markets, it also poses challenges like job displacement and economic inequality. Understanding globalization is crucial in navigating its effects on the economy.
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Aim: What is globalization and how does it affect the economy? Do Now: a) How has the world become more interconnected and dependent upon one another? (Provided several examples and how they have made the world a smaller place.) Homework: a) Work on your Current Events presentations refer to schedule for due dates. 1
How has the world become more interconnected and dependent upon one another? (Provided several examples and how they have made the world a smaller place.) -products from different places are being sold in our stores -we watch videos and tv shows from different places -we can call and talk to or chat with relatives or friends from different countries -if oil countries don t produce more oil, the price of them will rise -factories leave our country to open up in other countries where they worker and resources are cheaper 2
What is Globalization? Globalization refers to the increasing unification of the world's economy Trade has increased because of reduced international trade tariffs (taxes), export fees, and import quotas. 4
File:Mac Japan.jpg Pros of Globalization Pros of Globalization Productivity grows more quickly when countries produce goods and services in which they have a comparative advantage. Living standards can go up faster. Global competition and cheap imports keep a lid on prices, so inflation is less likely to derail economic growth. An open economy spurs innovation with fresh ideas from abroad. Export jobs often pay more than other jobs. Unfettered capital flows give the U.S. access to foreign investment and keep interest rates low. 6
Cons of Globalization Cons of Globalization Millions of Americans have lost jobs due to imports or production shifts abroad. Most find new jobs--that pay less. Millions of others fear losing their jobs, especially at those companies operating under competitive pressure. Workers face pay-cut demands from employers, which often threaten to export jobs. Service and white-collar jobs are increasingly vulnerable to operations moving offshore. U.S. employees can lose their comparative advantage when companies build advanced factories in low-wage countries, making them as productive as those at home 7
Pros Pros Cons Cons Productivity grows more quickly Living standards can go up faster Cheap imports keep prices low Open economy makes innovation happen with fresh ideas Pay more than other job U.S. access to foreign investment Keep interest rates low lost jobs due to imports or production shifts abroad Most find new jobs that pay less others fear losing their jobs Workers face pay-cut U.S. employees can lose their comparative advantage
Closing Questions Closing Questions How does globalization impact the economy of the United States? How does globalization impact the economy of developing nations? 10
