Economics Chapter 4: The Global Economy

Study Notes

Defined as a historical process facilitating the integration of economies worldwide.
Major driving force in globalization, characterized by technological advancement and human innovation.
Impacts living standards by allowing poorer countries access to foreign markets, investment opportunities, and international trade.

Must be viewed as a multidimensional phenomenon, not limited to economic aspects alone.
Involves various factors that contribute to global integration and interconnectedness.

Land: Natural resources provided by the environment.
Labor: Human effort and work utilized in production.
Capital: Man-made resources such as machinery and technology employed for production purposes.
Entrepreneur: Individual responsible for organizing production, making critical business decisions.

Diffusion of Technology: The spread and application of technological advancements across borders, essential for accelerating globalization.
Movement of Foreign Direct Investments (FDI): Establishment of foreign business operations or acquisition of business assets in another country, fostering economic growth.
- FDI involves acquiring at least 10% ownership in a foreign company, per OECD definitions.
- Recognized as a key engine of growth by the United Nations Conference on Trade and Development (UNCTAD).

Replacement of Workers: Machines and robots can displace human workers in various sectors.
Privacy and Security Concerns: Increased risk of hacking and data breaches.
Rise of Fake News: Dissemination of false information through digital platforms.
Cultural Loss: Potential erosion of local cultures due to global influences and homogenization.

Health Sector: Enhancements in medical equipment and online consultation options.
Financial Sector: Growth in e-commerce facilitating online payments and bill transactions.
Digital Devices: Strengthening connections among individuals globally.
Education Sector: Improved convenience for managing academic records and grades.