GLOBALIZATION

• GLOBALIZATION is a word used to describe the growing interdependence of the world's economies, cultures, and populations brought about by cross-border trade in goods and services, technology, flows of investment, people, and information.
• GLOBALIZATION is the process by which people, their culture, money, goods, and information can be transferred between countries with fer or no barriers. Because of these breakdowns in barriers, many different places become interdependent with one another
• GOODS are the physical, produced items traded between countries.
• SERVICES are business activities conducted betwee countries.
• EXPORTS are goods and services that are sold to individuals or companies outside their country of origin.
• IMPORTS are goods or services usually purchased from outside the country.
• TRADE DEFICIT occurs when spending on imports exceed what is earned from selling exports.
• TRADE SURPLUS is the opposite where earnings from exports top spending on imports
• TRADE BALANCE is not affected by tariffs or trade agreements, but by larger economic factors (e.g. government spending and monetary policy).
• PROTECTIONISM is a term for government restrictions on international trade aimed at blocking products and driving companies to purchase domestically produced goods or services.
• TARIFFS are taxes on imports.
• QUOTAS limit the quantity of imports.
• TRADE LIBERALIZATION is when countries allow people and businesses to buy and sell across borders with fewer restrictions.
• 6 Types of Protectionism: TARIFFS, QUOTAS, EMBARGOES, ADMINISTRATIVE BARRIERS, SUBSIDIES, and COMPETITIVE
• There are 3 main classifications of globalization: POLITICAL, SOCIAL, and ECONOMIC.
• There are 6 aspects of Globalization: ECONOMIC, TECHNOLOGICAL, POLITICAL, CULTURAL, DEMOGRAPHIC, and ENVIRONMENTAL.
• TRANS-NATIONAL CORPORATIONS are huge companies that does in several countries where they are much richer that entire countries in the less-developed world. They provide and enrich a country's economy, or some say, they exploit the workers with low pay and destroy the environment.
• There are 5 positive effects of Globalization: COMPETITION, CULTURE, LEGAL EFFECTS, STABLE SECURITY, and GLOBAL MARKET.
• There are 3 negative effects of Globalization: ENVIRONMENTAL DAMAGE, FLUCTUATION IN PRICES, JOB INSECURITY.
• COMPETITION - for domestic companies to survive in the market, they are forced to raised satisfaction levels, as well as their standards.
• CULTURE - there is no single civilization that had all good practices. Instead, the coming together of various cultures has made the world a better place. The welcoming of people from various backgrounds and civilizations has resulted in the creation of new cultures.
• LEGAL EFFECTS - since media coverage on violation of all rights receives attention from all over the world. Leaders address inequality since information and openness get promoted.
• STABLE SECURITY - it is extremely difficult to see two countries attacking each other if the economy of one depends on the economy of other countries.
• GLOBAL MARKET - most of the companies are increasing the consumer demand through extension and expansion of their value chain to international levels. The privatization of industries owned by states has enabled the emerging markets to be successful.
• ENVIRONMENTAL DAMAGE - increased production means increased utilization of natural resources. Increase trade results to increased transport. As a result, pollution has increased leading to climate change.
• FLUCTUATION IN PRICES - increased market competition. USA reduced their product prices because of countries such as China offer the same products cheaper since production cost in China is lower than the USA.
• JOB INSECURITY - the impact is mostly felt in developed countries since they outsource cheaper white-collar manufacturing jobs. Wages and manufacturing costs are lower in India and China, making the US and UK outsource cheaper labor.