Globalization Basics
What is globalization?
The development of an increasingly integrated global market economy marked by free trade and the flow of capital.
What are tariffs?
Taxes on imports.
Name a negative impact of globalization.
It can lead to job losses in domestic industries.
What is 'comparative advantage'?
The ability to produce a good with a lower opportunity cost than other goods.
What is the main purpose of IGOs (Intergovernmental Organizations)?
To facilitate cooperation among governments.
Name one positive impact of globalization.
Increases access to higher-quality, and or lower-priced goods.
What is the difference between imports and exports?
Imports are goods coming into a country, while exports are goods sold to foreign markets.
What is one way globalization can enhance cultural exchange?
By spreading ideas and products from one culture to another.
Define 'embargo.'
Restrictions on foreign trade.
Name a major agreement that replaced NAFTA.
United States–Mexico–Canada Agreement (USMCA).
What is one reason countries engage in trade?
To maximize output through comparative advantage. (To be able to make money doing what they do well.)
Define trade deficit.
When a nation’s imports are greater than its exports.
Explain the term 'scarcity.'
The situation where unlimited wants exceed limited resources.
What is 'diffusion' in globalization?
The spread of ideas or products from one place to another.
How does globalization affect developing countries?
It can provide access to new markets but may also exploit local resources.
What does the term 'interdependence' mean in the context of globalization?
Decisions made by one country affect other countries involved in trade.
What is protectionism?
The practice of shielding a country's domestic industries from foreign competition through tariffs and subsidies.
What is opportunity cost?
The highest valued alternative foregone in the pursuit of an activity.
What is 'surplus'?
When the quantity supplied is greater than the quantity demanded at existing prices.
Why is the U.S. considered the world's largest economy?
Due to its high GDP and significant global trade influence.
Explain the concept of 'outsourcing.'
Moving industries from a domestic location to a foreign country to reduce costs.
What is GDP?
The value of all goods and services produced within a country’s economy in one year.
How can globalization lead to inflation?
Increased demand for goods can raise prices, leading to a general rise in price levels.
Explain 'economic interdependence.'
When countries rely on each other for goods and services.
What role does geopolitics play in globalization?
It examines the relationship between politics, geography, and economics in shaping foreign policy.