Globalization: Importance & Impact

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Questions and Answers

What is one of the economic benefits of liberalization mentioned?

Increase in foreign direct investment (correct)

Reduction in native unemployment

Lowering of tax rates for MNCs

Decrease in immigration rates

What concern is often raised regarding large multinational companies (MNCs)?

They primarily focus on small domestic markets

They often pay higher taxes than local companies

They can influence government policies (correct)

They promote local job creation

Which of the following statements about immigration into OECD countries is supported?

Immigration rates have decreased in OECD countries.

Studies indicate that the fears about wage reductions are unfounded. (correct)

Immigration has led to increased unemployment among native workers.

The economic effects of immigration on native wages are a common concern.

What potential negative impact does economic liberalization have?

Tax avoidance strategies by large companies Signup and view all the answers

Which of the following is NOT a noted benefit of liberalization?

Decreased foreign investment Signup and view all the answers

What is the primary definition of globalization?

The spread of business and trade from domestic to global markets Signup and view all the answers

Which event led to a collapse in global trade in the 1930s?

The implementation of domestic protectionist measures by the US Signup and view all the answers

Which institutions were created to support the growth of global trade after WWII?

IMF, World Bank, and WTO Signup and view all the answers

What factor contributes to the interconnectedness of national economies?

Technology and transport Signup and view all the answers

How did the Great Depression affect global trade?

It resulted in widespread protectionist measures Signup and view all the answers

What was one result of the cooperation among governments after WWII?

Acceleration of global trade activities Signup and view all the answers

What role does immigration play in globalization?

It contributes to economic growth and integration Signup and view all the answers

What is a key characteristic of inward-looking policies?

Promoting domestic industries at the cost of foreign competition Signup and view all the answers

What is one reason that inward-looking protectionist plans are implemented?

To develop domestic industries Signup and view all the answers

How do protectionist policies like import substitution directly affect consumers?

They can increase the price of goods for consumers. Signup and view all the answers

What is a common concern associated with protectionism?

It raises the price of capital. Signup and view all the answers

What is economic liberalization primarily focused on?

Removing trade restrictions Signup and view all the answers

What impact does lowering tariffs generally have on GDP per capita?

It leads to more growth in GDP. Signup and view all the answers

Which of the following describes the 'Infant industry' argument in protectionist strategies?

Developing new industries in their early stages. Signup and view all the answers

Which factor is NOT a characteristic of economic liberalization?

Increase in tariffs Signup and view all the answers

What potential benefit does import substitution provide to domestic industries?

Reduced reliance on imports. Signup and view all the answers

Study Notes

Globalization: Importance & Impact

Globalization is the spread of business and trade from domestic to global markets, making national economies interconnected.
Globalization occurs through technology and transportation.
Key aspects of globalization include growth in world trade, inward looking domestic protectionist policies, economic liberalization, and immigration.

Importance of Globalization

Globalization's importance includes:
- Growth in world trade (e.g. average growth before WWI was 5%).
- Inward-looking domestic protectionist policies
- Economic liberalization
- Immigration

Economic Liberalization

Economic liberalization is the removal of trade restrictions, such as tariffs.
Globalization leads to economic liberalization including deregulation and reducing tariffs.
Economic liberalization can lead to benefits like comparative trade, long-term growth, and increased foreign investment.
Potential drawbacks include large multinational corporations influencing government policies and tax avoidance by companies.

Global Capital Flows

Globalization involves the movement of capital across borders.
No further details provided.

Immigration

Immigration is another way globalization increases interconnectedness.
Immigration to developed countries (OECD) has been steadily increasing.
Studies show no strong evidence that immigration negatively impacts native workers wages or employment.

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Description

This quiz explores the significance of globalization and its effects on national economies. It covers topics such as the growth of world trade, economic liberalization, and the challenges of protectionist policies. Test your understanding of how globalization shapes our interconnected world.