Global Economy Mechanisms - Lecture 2
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Questions and Answers

What percentage of undernourished individuals live in developing countries?

  • 90%
  • 98% (correct)
  • 80%
  • 75%

What is the daily income of the bottom 50% of the population?

  • $5 a day
  • $10 a day
  • $7 a day (correct)
  • $15 a day

By 2050, the global population is projected to reach approximately how many billion people?

  • 8.5 billion
  • 9 billion
  • 10 billion
  • 9.7 billion (correct)

What is the expected increase in global food demand by 2050?

<p>60% (B)</p> Signup and view all the answers

What is the average daily income of the top 1% of the population?

<p>$290 a day (B)</p> Signup and view all the answers

What was the increase in life expectancy at birth in less developed countries since 2000?

<p>5 years (A)</p> Signup and view all the answers

How many people live below the international extreme poverty line of $1.90 a day?

<p>830 million (D)</p> Signup and view all the answers

What is the estimated number of undernourished individuals as of 2016?

<p>800 million (D)</p> Signup and view all the answers

What is the primary definition of globalization?

<p>A process of increasing internationalization of markets for goods and services. (D)</p> Signup and view all the answers

Which of the following is NOT considered a medium of globalization?

<p>Barriers (C)</p> Signup and view all the answers

What is a potential negative impact of globalization mentioned in the content?

<p>Erosion of incomes for the poor. (B)</p> Signup and view all the answers

Globalization impacts which of the following?

<p>Cultural exchanges and technology. (B)</p> Signup and view all the answers

What role does public perception play in globalization?

<p>It can influence feelings of vulnerability and disempowerment. (A)</p> Signup and view all the answers

What is one of the main forms of globalization according to the lecture structure?

<p>Intra-continental integration. (C)</p> Signup and view all the answers

In the context of globalization, which of the following is considered a challenge?

<p>Exacerbation of economic inequality. (B)</p> Signup and view all the answers

What is one of the quantifying instruments of the global economy?

<p>Trade balance measurements. (A)</p> Signup and view all the answers

What was the total number of Nike retail stores worldwide in 2013?

<p>1,045 (A)</p> Signup and view all the answers

In which year did Nike experience its highest number of retail stores according to the provided data?

<p>2019 (C)</p> Signup and view all the answers

What is the primary aim of the WTO?

<p>To promote free competition and economic reforms (B)</p> Signup and view all the answers

How many retail stores did Nike have in 2015?

<p>931 (C)</p> Signup and view all the answers

Which organization was formed in 1947 with the goal of facilitating global trade?

<p>General Agreement on Tariffs and Trade (GATT) (A)</p> Signup and view all the answers

By how many stores did the total number of Nike retail stores increase from 2012 to 2013?

<p>30 (C)</p> Signup and view all the answers

Which of the following years showed a decrease in the number of Nike retail stores compared to the previous year?

<p>2014 (D)</p> Signup and view all the answers

What percentage of global trade flows are managed by the WTO's member states?

<p>94% (B)</p> Signup and view all the answers

What was the total number of Nike retail stores in 2009?

<p>826 (B)</p> Signup and view all the answers

Where is the headquarters of the World Trade Organization (WTO) located?

<p>Geneva, Switzerland (A)</p> Signup and view all the answers

Which year had the least number of Nike retail stores in the given data?

<p>2015 (D)</p> Signup and view all the answers

What is a key principle that the WTO upholds regarding trade relationships?

<p>Non-discrimination in trade (C)</p> Signup and view all the answers

What was the number of Nike retail stores in 2016?

<p>1,182 (B)</p> Signup and view all the answers

What does foreign direct investment (FDI) represent?

<p>An investment made to acquire lasting interest in foreign enterprises (B)</p> Signup and view all the answers

How many employees approximately work at the WTO?

<p>600 (B)</p> Signup and view all the answers

Which of the following organizations succeeded GATT?

<p>WTO (D)</p> Signup and view all the answers

Which country had the highest net inflow of foreign direct investment as a percentage of GDP according to the provided data?

<p>Luxembourg (C)</p> Signup and view all the answers

What was the percentage decrease in global FDI flows in the first half of 2017 compared to the second half of 2016?

<p>3% (B)</p> Signup and view all the answers

What type of trade arrangement does the WTO promote?

<p>Gradual liberalization of trade (A)</p> Signup and view all the answers

Which of the following countries is NOT mentioned as a context for FDI data?

<p>Brazil (D)</p> Signup and view all the answers

What does it mean when FDI is characterized as net inflows?

<p>The investment made by foreign entities in domestic enterprises minus outflows (A)</p> Signup and view all the answers

What percentage of GDP per capita growth in developing economies is attributed to labour productivity from 1990 to 2015?

<p>92% (D)</p> Signup and view all the answers

What was the average annual increase in GDP per capita for developing economies from 1991 to 2015?

<p>+3.6% (C)</p> Signup and view all the answers

Which of the following statements about food waste in rich countries is correct?

<p>Rich countries waste 222 million tons of food each year. (D)</p> Signup and view all the answers

Over the last 20 years, what trend has been observed regarding the average proportion of women in parliament?

<p>It has doubled. (D)</p> Signup and view all the answers

What is the main driver of economic growth according to the information provided?

<p>Labour productivity (B)</p> Signup and view all the answers

What was the proportion of GDP per capita growth attributed to labour productivity in developed economies?

<p>86% (A)</p> Signup and view all the answers

Which region's net food production is almost equivalent to the food wasted by rich countries?

<p>Sub-Saharan Africa (D)</p> Signup and view all the answers

What was the overall impact of labour productivity on world GDP from 1990 to 2015?

<p>It resulted in the doubling of world GDP. (B)</p> Signup and view all the answers

Flashcards

Globalization

The process of connecting individuals and entities across national boundaries through various flows, including people, information, capital, and goods.

Globalization

The increasing integration of national economies, cultures, technologies, and governance.

Internationalization of Markets

The expansion of markets for goods and services, technology, and financial systems beyond national borders.

Global Interdependence

The interconnectedness and interdependence between nations due to globalization.

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Fear of Globalization

The fear that globalization exacerbates inequality by potentially eroding incomes, increasing vulnerability, and reducing empowerment of the poor.

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Positive Impacts of Globalization

Improvements in various aspects, due to globalization, such as connectivity, communication, and access to goods and services for a large segment of the world population.

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Negative Impacts of Globalization

The potential negative effects of globalization, such as increased income inequality and vulnerability, primarily affecting the less privileged.

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Quantifying Instruments of Global Economy

Various mechanisms and instruments used to quantify and analyze the global economy, like trade statistics and financial indicators.

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Labor Productivity

The increase in output per unit of labor input. It reflects how efficiently labor is being used in an economy.

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Gross Domestic Product (GDP)

The total value of goods and services produced in a country in a given period.

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GDP per capita

The GDP per capita is a measure of the average income of a country's residents. It is calculated by dividing the GDP of a nation by its population.

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Developing Economies

Developing economies are characterized by lower levels of income, industrialization, and infrastructure compared to developed economies.

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Developed Economies

Developed economies are characterized by higher levels of income, industrialization, infrastructure, and quality of life.

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Food Waste

Food waste is the discarding of edible food at any stage in the food supply chain, from production to consumption.

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Women in Parliament

The proportion of women holding seats in national parliaments or similar legislative bodies.

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What is Foreign Direct Investment (FDI)?

Foreign direct investment (FDI) is an investment made by a company or individual in a foreign country to gain lasting control over an enterprise operating there. The aim is to acquire a long-term interest, influencing management and operations of the foreign firm.

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How does UNCTAD define FDI?

According to the United Nations Conference on Trade and Development (UNCTAD), FDI refers to investments seeking lasting interest in enterprises outside the investor's own economy. Think of it as a more substantial commitment than just buying shares.

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What are Global FDI flows?

Global FDI flows are the total amounts of money invested by companies and individuals across national borders to gain long-term control in businesses operating in other countries. Measured in billions of USD.

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What does 'Foreign direct investment, net inflows (% of GDP)' represent?

The Global FDI flows, measured as a % of each nation's GDP, are compared to show the relative significance of FDI in different country-specific GDPs.

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What does 'Foreign direct investment, net outflows (% of GDP)' represent?

The Global FDI outflows, measured as a % of each nation's GDP, are compared to showcase the relative significance of investment made by local businesses in other countries. Higher percentage indicates more investment abroad.

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What is the WTO?

The World Trade Organization (WTO) is an international organization that regulates international trade. It aims to promote free and fair trade between its 164 member states.

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When was the WTO founded?

The WTO was founded in 1995, replacing the General Agreement on Tariffs and Trade (GATT) which was established in 1947.

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How many members does the WTO have?

The WTO has 164 member states, covering approximately 94% of global trade flows.

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What is non-discrimination in trade?

One of the key principles of the WTO is non-discrimination in trade, meaning that each country should treat all other members equally.

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How does the WTO promote free competition?

The WTO aims to promote free competition by encouraging a gradual liberalization of trade through negotiations among its member states.

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What are the development and economic reforms promoted by the WTO?

Another goal of the WTO is to promote development and economic reforms in its member states.

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What are the predictability and stability aspects of the WTO?

The WTO strives to achieve predictability and stability in international trade through agreements and rules.

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Where is the WTO headquarters located?

The WTO headquarters is located in Geneva, Switzerland.

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Division of Labour

The separation of tasks in a production process, often across international borders, to take advantage of cost differences or specialized expertise.

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EU (European Union)

A regional economic bloc established in 1993, consisting of 27 member states in Europe, fostering free trade and economic integration.

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NAFTA (North American Free Trade Agreement)

A trade agreement signed in 1993 between the United States, Canada, and Mexico, eliminating trade barriers and facilitating free movement of goods and services.

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State Sovereignty

The power and authority of a nation-state to govern its territory and people independently, often becoming challenged by global forces.

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Cultural Globalization

The exchange of symbolic representations across borders, including cultural practices, values, beliefs, and information, contributing to a more interconnected world.

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Technological Globalization

The use of communication technologies, like email, video conferencing, and the internet, to facilitate global interactions and collaboration.

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Economic Globalization

The integration and interdependence of national economies, driven by factors like trade, investment, and financial flows, leading to a globalized marketplace.

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Extreme Poverty Line

The international standard used to measure poverty, defined as living on less than $1.90 per day. This threshold is adjusted annually for inflation.

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Undernourishment

A state of being undernourished means not having enough food to lead a healthy and active life. This can lead to health problems and reduced productivity.

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Projected Global Population (2050)

The projected global population in 2050. Meeting the food needs of this growing population poses a significant challenge.

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Food Production Increase Needed (2050)

The projected increase in food production necessary to feed the growing global population by 2050. This signifies a considerable need to increase food production and distribution.

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Location of Undernourished People

The majority of undernourished people live in developing countries. This highlights the connection between poverty and food security.

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Global Income Disparity

The top 1% of the global population earns an average of $290 per day, while the bottom 50% earns only $7 per day. This extreme disparity highlights the inequality in global wealth distribution.

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Average Income in Developing Countries

The average income of individuals in developing countries is significantly lower than in developed countries. This demonstrates the considerable economic gap between nations.

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Life Expectancy in Less Developed Countries

Life expectancy at birth has increased from 63 to 68 years in less developed countries since 2000. This signifies progress in health and living conditions, though disparities remain.

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Study Notes

Global Economy Mechanisms - Lecture 2

  • Globalization is the process of creating interconnected networks across continents, facilitated by diverse flows like people, information, ideas, capital, and goods
  • Globalization erodes national boundaries, integrating national economies, cultures, technologies, and governance, establishing complex interdependence
  • Globalization increases international markets for goods and services, including production, finance, competition among corporations, technology, and industries
  • Advances in globalization have benefited many, but some fear it exacerbates inequality and harms the poor
  • In 2016, 830 million people lived below the international poverty line (US$1.90 per day)
  • Nearly 800 million people were estimated to be undernourished in 2016
  • Global food production needs a significant increase (60%) by 2050 to meet anticipated demands for a global population of 9.7 billion people
  • 98% of undernourished people reside in developing countries
  • Average income for the top 1% of the world's population was $290 per day in 2016, while the bottom 50% earned only $7
  • Life expectancy has increased from 63 to 68 years in less developed countries since 2000
  • From 1990 to 2015, global GDP nearly doubled
  • Labour productivity is a significant driver of economic growth, contributing to 92% growth in developing economies and 86% in developed economies
  • GDP per capita increased by 3.6% annually in developing economies between 1991 and 2015, significantly exceeding the growth rate in developed economies
  • The number of Nike retail stores grew from 671 in 2009 to 1,096 in 2020
  • The global economic power is shifting towards the E7 economies (China, India, Indonesia, Brazil, Russia, Mexico, and Turkey) in contrast to the G7
  • Vietnam, the Philippines, and Nigeria are projected to be among the top 10 global economies by 2050
  • Globalization has economic, political, cultural, and technological dimensions
  • The nation-state's influence has decreased due to globalization's increasing economic and cultural linkages
  • Increased pressure to collaborate internationally arises from the economic and cultural ties between countries

Dimensions of Globalization

  • Economic: Free trade, minimum tariff barriers, international social division of labour displaced by technical division
  • Political: Nation-states losing power, increasing pressure for international collaboration
  • Cultural: Social arrangements, the exchange and expression of symbols that represent facts, beliefs, tastes, and values
  • Technological: E-mail, video conferencing, internet, worldwide web, company intranets, advancements in transportation technology

Globalization: The Path

  • Capitalism, multinational corporations, and lifestyle consumerism are key features of current globalization
  • The nation-state is challenged by the rise of international relations and the crisis of the state
  • Globalization leads to a decline in the power of states, and pressure to work together across international political boundaries

Measurements of Globalization

  • Synthetic index: The KOF Globalization Index measures economic, social, and political dimensions of globalization
  • Single index: Financial globalization using Foreign Direct Investment (FDI) as a key measure

Threats to Globalization

  • COVID-19 pandemic
  • Increased non-tariff trade barriers
  • Growing environmental concerns (energy security, water scarcity)
  • Backlash against free labor flow (tightened immigration controls)

Case Study: Advantages/Disadvantages of Globalization

  • Advantages: Cheaper goods, more competition, reduced poverty, specialization of production, and transfer of ideas
  • Disadvantages: Trade imbalances, loss of cultural diversity, corporate tax avoidance, unsustainable growth, and brain drain

Case Study: Global Inequality in Living Conditions

  • Health, education, and income show vast disparities between countries
  • Children in countries with poor health are significantly more likely to die than those in countries with good health
  • Education levels vary substantially, with some countries offering significant educational opportunities while others offer limited chances
  • Significant disparities in income exist between the richest and poorest countries

Further Reading

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Explore the complexities of globalization in this quiz, focusing on its impact on national economies and international markets. Understand the challenges it poses, including inequality and food production demands. Dive into statistics highlighting the state of global poverty and undernourishment.

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