Globalization
What is Globalization?
When different countries are working together and their economies are connected
What are the 4 types of Unemployment?
Frictional, Structural, Cyclical, Seasonal
What is the Federal Reserve System? What does it do?
The central bank of the United States. It provides a safer and more flexible financial system.
What does GDP stand for?
Gross Domestic Product
Are the following part of the Good, Bad or Ugly of Globalization?
•Often the developed countries take advantage of those less developed ones and pillage resources and funnel money to corrupt governments
The Ugly
Which type of Unemployment is this?
–When jobs are only available during a specific season
Seasonal Unemployment
What does the Federal Reserve System regulate when it comes to banks?
The amount of money that they charge to other banks
What is GDP measuring?
What percent of unemployment is considered full employment?
5% unemployment
Is the following part of the Good, Bad, or Ugly of Globalization?
•Free Trade, lower prices, greater options, bigger export market, competition for better products
•Labor could move to other areas, countries can specialize in what they are good at, trade for what they are not good at
The Good
Which type of Unemployment is this?
–When a person leaves one job and is looking for another, looking for 1st job or re-entering the workforce.
Frictional
Why does the Federal Reserve try to make it cheaper to borrow money?
So more people will want to borrow and spend money (helps the economy)
What is Real GDP?
It is the amount that does not include inflation
What is an embargo?
When you cut off a country or area from trading with you
How is Globalization a good thing? Give an Example
(From our videos)
It allows for products and other ideas to be spread around the world
Examples:
Diet Coke in other countries
NBA being popular in China
Which kind of Unemployment is this?
–Long-term unemployment due to the economy or not having the skills needed for a job
Structural
What percent does the Federal Reserve try to keep the inflation rate at?
2%
What is Nominal GDP?
It is the amount that is after year 1 (includes inflation)
What is a tariff?
An added tax on imported goods
Is the following part of the Good, Bad or Ugly of Globalization?
•Free trade can harm developing countries
•Pollution and abuse of resources to make money in trade
•Labor drain as best labor leaves countries for better opportunities
•Tax Games- Firms go to countries that have better tax plans (Amazon- Bermuda, Google-Luxembourg)
The Bad
Which kind of Unemployment is this?
–When unemployment rises and falls due to the state of the economy
Cyclical Unemployment
What is Monetary Policy?
Control of the money supply (interest rates)
Complete the following problem. Calculate the Nominal GDP
Year 2:
100 Cups of Coffee at $3 per cup:
100 slices of pie at $1.50 per slice:
100 Cups of Coffee at $3 per cup: $300
100 slices of pie at $1.50 per slice:$150
Nominal GDP: $450
What is the point of a treaty or an international organization in macroeconomics?
For countries to trade and work together