3 1. Economic Interdependence GlobalizationDefinition: globalization is the process in which trade and culture link together countries around the world.One major effect of global trade is the increased economic interdependence among the world’s countries.Economic interdependence occurs because countries vary greatly in the types of goods and services they need and can provide.
4 Developed and Developing Countries Developed CountriesIndustrializedStrong economiesHigh standard of livingDeveloping CountriesLow standard of livingLess industrializedInadequate health carePoor educationOther characteristics for some nationsLack of political and social stabilityOn going warConflict
5 Multinational Corporations C. Large companies that operate in multiple countriesExamples:
6 iii. Benefit to multinational corporations is outsourcing iii. Benefit to multinational corporations is outsourcing. Outsourcing is beneficial because they create jobs and improve the standard of living in the developing countries where they operate.iv. A potential problem is that they do not always improve the standard of living in some countries and they contribute to job loss in the company’s home country.
7 Global Economic TiesOne effect of economic interdependence is that certain events or actions can affect the economies of many nations.Example:
8 2. Global TradeFree Trade is the exchange of goods among nations without trade barriers such as tariffs (taxes).International Trade OrganizationsExist to help promote and regulate free tradeExamples:World Trade Organization (WTO): consists of 150 countries which monitors national trade policies and helps resolve trade disputes.Organization of Petroleum Exporting Countries: (OPEC): it is a group of oil-rich nations, who work to control the production and price of oil
9 Regional TradeMany countries belong to at least one regional trade bloc, or group, which they form to promote free trade and to deal with economic issues with neighboring nations.Examples:European Union (EU): largest regional trade bloc. It has member countries.NAFTA: North American Free Trade Agreement. This agreement is between Canada, the United States and Mexico.
10 D. Effects of Global Trade Read the section in your book and identify two benefits and two consequences to global trade. (page. 994)Also identify and explain the Fair Trade movement.
11 3. Cultural exchange Cultural traits spread Globalization leads to changes in popular culture: What is ‘Popular Culture’?Globalization is causing cultural diffusionThe spread of cultural traits from one region to another.How do we see this trend in our own city?Methods of cultural diffusion include the following:MASS MEDIATravel
12 Effects of Globalization Read this section in your book and make a list of pros and cons of globalization. Provide examples!Answer the following questions:Is cultural diffusion positive or negative?What is the biggest challenge presented by globalization?This section is on page 995.