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Questions and Answers
What was the primary focus of the International Bank for Reconstruction and Development (World Bank)?
What was the primary focus of the International Bank for Reconstruction and Development (World Bank)?
What is a key function of the International Monetary Fund (IMF)?
What is a key function of the International Monetary Fund (IMF)?
What economic phenomenon occurred during the 1973 Oil Crisis?
What economic phenomenon occurred during the 1973 Oil Crisis?
Which of the following best describes neoliberalism?
Which of the following best describes neoliberalism?
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What key policies does the Washington Consensus promote?
What key policies does the Washington Consensus promote?
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How did government spending impact economies during the Keynesian Era?
How did government spending impact economies during the Keynesian Era?
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What was a significant outcome of the end of the Bretton Woods system?
What was a significant outcome of the end of the Bretton Woods system?
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How do the World Bank and IMF remain relevant today?
How do the World Bank and IMF remain relevant today?
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What does the term 'Purchasing Power' refer to?
What does the term 'Purchasing Power' refer to?
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Which of the following best describes economic globalization?
Which of the following best describes economic globalization?
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Which measurement reflects the growth of trade value as a percentage of world GDP from 1980 to 2007?
Which measurement reflects the growth of trade value as a percentage of world GDP from 1980 to 2007?
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What is a key characteristic of mercantilism?
What is a key characteristic of mercantilism?
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What role did technology play in high-frequency trading?
What role did technology play in high-frequency trading?
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Which system's goal was to prevent economic catastrophes after World War II?
Which system's goal was to prevent economic catastrophes after World War II?
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How did Keynesian economic theory propose to handle economic slowdowns?
How did Keynesian economic theory propose to handle economic slowdowns?
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What is the function of 'Foreign Direct Investments' (FDI)?
What is the function of 'Foreign Direct Investments' (FDI)?
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What does 'Protectionism' refer to in economic practices?
What does 'Protectionism' refer to in economic practices?
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What defines the flow of 'international capital'?
What defines the flow of 'international capital'?
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Which option describes the economic system that was prevalent before the 18th century?
Which option describes the economic system that was prevalent before the 18th century?
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What is a characteristic of the current world economy's currency system?
What is a characteristic of the current world economy's currency system?
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What is one major factor driving economic globalization?
What is one major factor driving economic globalization?
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What is a characteristic of multinational corporations (MNCs)?
What is a characteristic of multinational corporations (MNCs)?
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Which of the following illustrates a disadvantage of multinational corporations?
Which of the following illustrates a disadvantage of multinational corporations?
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What role do global institutions like the International Monetary Fund (IMF) play in developing countries?
What role do global institutions like the International Monetary Fund (IMF) play in developing countries?
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What was a primary objective of the World Bank?
What was a primary objective of the World Bank?
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What defines the term 'global companies' as per the Iwan (2012) classification?
What defines the term 'global companies' as per the Iwan (2012) classification?
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Which of the following is an advantage of multinational corporations?
Which of the following is an advantage of multinational corporations?
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What impact did post-World War II integration have on global markets?
What impact did post-World War II integration have on global markets?
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How do regional development banks like the Asian Development Bank (ADB) contribute to their member countries?
How do regional development banks like the Asian Development Bank (ADB) contribute to their member countries?
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What is a common misconception about multinational corporations?
What is a common misconception about multinational corporations?
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What is an essential function of the World Bank?
What is an essential function of the World Bank?
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Why are multinational corporations influential in global economies?
Why are multinational corporations influential in global economies?
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What is the primary focus of private international financial institutions like Citigroup?
What is the primary focus of private international financial institutions like Citigroup?
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Which of the following characterizes the role of global institutions in economic development?
Which of the following characterizes the role of global institutions in economic development?
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Which type of financial institution primarily operates in partnership with member countries to enhance financial stability?
Which type of financial institution primarily operates in partnership with member countries to enhance financial stability?
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Study Notes
Global Economy & Globalization
- The global economy is a system of interconnected international exchange of goods and services.
- Production, use, and exchange value of goods and services differ across countries.
- Economic definitions, models, and valuations vary across countries.
- Economic Globalization - increasing interdependence of economies.
- Key drivers of economic globalization:
- Cross-border trade
- International capital flows
- Rapid spread of technology
- Examples in the Philippines:
- Trade partnerships with China, United States, and Australia.
- Flow of international capital:
- Foreign direct investments (FDI), e.g., Toyota Motor Philippines
- Foreign portfolio investments
- Trade flows
- External assistance
- External commercial borrowings
- Private loan flows
Mercantilism
- Prevalent economic system from 16th-18th centuries, primarily in Europe.
- Focuses on a country's self-sufficiency and wealth accumulation through trade surpluses.
- Key features:
- Economic competition between countries
- Protectionism: tariffs, trade restrictions, subsidies
- Colonialism for raw materials and markets
Bretton Woods System
- Established in 1944 to prevent economic catastrophes following WWII
- Heavily influenced by John Maynard Keynes, who advocated government intervention in the economy.
- Creation of key institutions:
- World Bank: funded postwar reconstruction projects
- International Monetary Fund (IMF): lender to prevent credit crises and support economic growth.
Keynesian Economics
- Argued that economic crises arise from insufficient spending.
- Governments should revitalize markets through capital infusions.
- Led to “Global Keynesianism” emphasizing active government involvement in economic management.
Neoliberalism & The Washington Consensus
- Emerged as a counter to Keynesianism, advocating for minimal government intervention.
- Washington Consensus promoted by World Bank and IMF:
- Reduced government spending
- Privatization of state-owned enterprises
- Reduced trade barriers
Global Markets
- Post-World War II integration of global markets began with American corporations.
- Japanese and European corporations followed, benefiting from military demand and expanding into international markets.
Types of Companies
- International companies: operate in multiple countries but have a strong home country focus.
- Multinational companies: operate in multiple countries with a centralized control and diverse operations.
- Transnational companies: operate globally with a decentralized structure and focus on global efficiency.
- Global companies: operate globally with a single unified structure and global strategy.
Multinational Corporations (MNCs)
- Companies that operate in multiple countries.
- Characteristics:
- Global presence: subsidiaries in multiple countries.
- Centralized control often in home country.
- Diverse operations across sectors.
- Significant economic power, influencing economies and markets.
- Advantages:
- Economies of scale through large-scale operations.
- Access to resources, talent, and raw materials in various countries.
- Market expansion to larger customer bases.
- Disadvantages:
- Cultural challenges: difficulty adapting to local preferences.
- Regulatory hurdles: complex regulations in different countries.
- Public perception: potential for negative perceptions of exploitation.
- Role in the global economy:
- Job creation in host countries.
- Technological transfer to local markets.
- Foreign direct investments (FDI) to support economies and infrastructure.
- Examples: Apple, Coca-Cola, Toyota, Unilever.
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Description
Test your knowledge on the concepts of global economy and globalization. This quiz covers economic systems, trade partnerships, and the impact of foreign direct investments, using examples from the Philippines. Explore the key drivers of economic globalization and the historical context of mercantilism.
