TOPIC 1 SUMMARY
1.Globalization refers to the integration between different countries and economies leading to the increased impact of international influences on all aspects of life and economic activity.
2.The global economy is a way of describing the activities of all the economies of the world as a whole, reflecting the fact that they are now increasingly linked together into an overall economic unit.
3.Gross world product is the sum of the total output of goods and services produced by all economies in the world over a given period of time.
4.The growth of world trade is an important indicator of the extent of globalization. World trade has increased at around double the rate of world economic growth over the past half century.
5.The pattern and direction of world trade has changed to reflect the increasing importance of advanced technology and services and the growth of the Asia Pacific region.
6.The process of globalization has occurred most rapidly in global finance, which faces few barriers and is driven mostly by speculative activity, i.e. investors seeking to make short term profits out of fluctuations in exchange rates, interest rates and other financial indicators.
7.Foreign direct investment (FDI) is the injection of funds into an economy to establish a new business or purchase an existing business. FDI flows are driven by transnational corporations (TNCs) and often involve the transfer of
technological innovations between economies.
8.Technology, transport and communication have driven increased economic integration by facilitating linkages between businesses, individuals and nations in the global economy.
9.Globalization has also contributed to the international division of labor, in part because of the migration of workers to countries where jobs are plentiful or better paid, and also because of the shift of business between economies,
in search of the most efficient and cost-effective labor.
10.Free trade is a situation where there are no artificial barriers to trade imposed by governments that restrict the free exchange of goods and services between economies.
11.Protection can be defined as any type of government action that has the effect of giving domestic producers an artificial advantage over foreign competitors.
12.The main methods of protection are: tariffs (a tax on imports); subsidies (a payment to local producers); local content rules (a requirement that a proportion of goods are made locally); quotas (a limit on the quantity of goods imported) and export incentives (other means to encourage local production).
13.Trade agreements are a way of reducing barriers to trade between nations. Recent years have seen the growth of multilateral agreements (such as NAFTA and the ASEAN free trade agreement) and bilateral agreements (such as
the AUSFTA).
14.The World Trade Organization is a global organization that enforces the existing WTO agreement, resolves trade disputes and is the major forum for global trade negotiations pursuing the goal of global free trade.
2.The global economy is a way of describing the activities of all the economies of the world as a whole, reflecting the fact that they are now increasingly linked together into an overall economic unit.
3.Gross world product is the sum of the total output of goods and services produced by all economies in the world over a given period of time.
4.The growth of world trade is an important indicator of the extent of globalization. World trade has increased at around double the rate of world economic growth over the past half century.
5.The pattern and direction of world trade has changed to reflect the increasing importance of advanced technology and services and the growth of the Asia Pacific region.
6.The process of globalization has occurred most rapidly in global finance, which faces few barriers and is driven mostly by speculative activity, i.e. investors seeking to make short term profits out of fluctuations in exchange rates, interest rates and other financial indicators.
7.Foreign direct investment (FDI) is the injection of funds into an economy to establish a new business or purchase an existing business. FDI flows are driven by transnational corporations (TNCs) and often involve the transfer of
technological innovations between economies.
8.Technology, transport and communication have driven increased economic integration by facilitating linkages between businesses, individuals and nations in the global economy.
9.Globalization has also contributed to the international division of labor, in part because of the migration of workers to countries where jobs are plentiful or better paid, and also because of the shift of business between economies,
in search of the most efficient and cost-effective labor.
10.Free trade is a situation where there are no artificial barriers to trade imposed by governments that restrict the free exchange of goods and services between economies.
11.Protection can be defined as any type of government action that has the effect of giving domestic producers an artificial advantage over foreign competitors.
12.The main methods of protection are: tariffs (a tax on imports); subsidies (a payment to local producers); local content rules (a requirement that a proportion of goods are made locally); quotas (a limit on the quantity of goods imported) and export incentives (other means to encourage local production).
13.Trade agreements are a way of reducing barriers to trade between nations. Recent years have seen the growth of multilateral agreements (such as NAFTA and the ASEAN free trade agreement) and bilateral agreements (such as
the AUSFTA).
14.The World Trade Organization is a global organization that enforces the existing WTO agreement, resolves trade disputes and is the major forum for global trade negotiations pursuing the goal of global free trade.