Globalization of Economic Activity
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Questions and Answers

What happens to American employees when companies build factories in low-wage countries?

  • They benefit from increased job opportunities at home.
  • They become less competitive because of reduced productivity.
  • They gain job security due to higher productivity.
  • They lose competitiveness as productivity increases in these factories. (correct)

    • Which types of jobs are vulnerable to operations being sent overseas due to globalization?

  • Globalization affects only executive positions.
  • Service jobs and white-collar jobs are also at risk. (correct)
  • Only blue-collar jobs are at risk.
  • All international jobs are secure from outsourcing.

    • What is a disadvantage of globalization mentioned in the content?

  • Vulnerability of various job sectors to overseas operations. (correct)
  • Increased tariffs on imported goods.
  • Improved quality of products in local markets.
  • Job creation in high-wage countries.

    • Which factor contributes to American employees losing their competitiveness?

    <p>State-of-the-art factories built in low-wage countries.</p> Signup and view all the answers

    What encompasses the process of economic interdependence?

    <p>Increased interconnectedness among global economies.</p> Signup and view all the answers

    What is a key characteristic of economic interdependence among nations?

    <p>Economies are linked through international movements.</p> Signup and view all the answers

    Which factor does NOT contribute to the high degree of economic interdependence?

    <p>Appointment of universal trade leaders.</p> Signup and view all the answers

    What does the complexity of economic interdependence imply?

    <p>The consequences of interdependence can vary significantly.</p> Signup and view all the answers

    During which period was the U.S. economy characterized by reduced dependence on trade?

    <p>1890-World War II</p> Signup and view all the answers

    What aspects of a nation’s economy are linked through international trade?

    <p>Goods and services, labor, and technology.</p> Signup and view all the answers

    What trend characterized the U.S. economy after World War II?

    <p>Increasing openness to trade</p> Signup and view all the answers

    The increasing integration into foreign activities primarily reflects which phenomenon?

    <p>Globalization of economic activity.</p> Signup and view all the answers

    Which country was the largest source of U.S. imports in 2018?

    <p>China</p> Signup and view all the answers

    Which of the following reflects the U.S. trade partner with the highest exports in 2018?

    <p>Canada</p> Signup and view all the answers

    Which of the following does NOT represent an aspect of international economic linkages?

    <p>Local market restrictions.</p> Signup and view all the answers

    Economic interdependence challenges which of the following assumptions?

    <p>Countries can thrive independently.</p> Signup and view all the answers

    What was the total value of trade with Germany in 2018?

    <p>$183.6 billion</p> Signup and view all the answers

    Which trend occurred in the U.S. economy from the late 1800s to the period before World War II?

    <p>Decreased global interdependency</p> Signup and view all the answers

    Which of the following factors is crucial for understanding the uneven effects of economic interdependence?

    <p>Diverse historical and political contexts.</p> Signup and view all the answers

    What was the value of U.S. exports to South Korea in 2018?

    <p>$33.0 billion</p> Signup and view all the answers

    What characterized the world trade trend during the late 1800s?

    <p>Relative openness and rising trade</p> Signup and view all the answers

    What is one advantage of international trade for firms?

    <p>Increased total productivity</p> Signup and view all the answers

    Which statement accurately describes the workforce requirements in exporting industries?

    <p>Require a more educated workforce</p> Signup and view all the answers

    In which year did American jobs supported by exports total the highest number according to the data?

    <p>2014</p> Signup and view all the answers

    How many millions of American jobs were supported by exports in 2010?

    <p>10.0 million</p> Signup and view all the answers

    What trend can be observed about jobs supported by exports from 2010 to 2016?

    <p>Overall fluctuation with an increase first, then steady</p> Signup and view all the answers

    Which statement is true regarding wages paid by exporters compared to non-exporters?

    <p>Exporters pay higher wages than non-exporters</p> Signup and view all the answers

    Which category in the jobs supported by exports data had the highest numbers in 2016?

    <p>Total</p> Signup and view all the answers

    What impact does international trade generally have on wages in exporting industries?

    <p>It raises wages compared to non-exporting industries</p> Signup and view all the answers

    What is one of the main benefits of globalization regarding productivity?

    <p>Faster productivity increases for countries specializing in comparative advantage.</p> Signup and view all the answers

    How does globalization affect living standards?

    <p>Living standards can increase more rapidly due to economic growth.</p> Signup and view all the answers

    What is a potential consequence of global competition?

    <p>Prices may be kept lower, thus reducing inflation disruption.</p> Signup and view all the answers

    Jobs in which type of industry typically pay more within globalization?

    <p>Export industries.</p> Signup and view all the answers

    What is a disadvantage of globalization for American workers?

    <p>Loss of jobs due to imports or production shifts abroad.</p> Signup and view all the answers

    What do workers in import-competing industries fear the most?

    <p>Getting laid off due to market pressures.</p> Signup and view all the answers

    What impact does globalization have on capital movement in the United States?

    <p>It allows for unfettered capital movements and maintains low interest rates.</p> Signup and view all the answers

    What is a common employer tactic used in response to wage demands from workers?

    <p>Threatening to export jobs abroad if wage concessions aren't accepted.</p> Signup and view all the answers

    Study Notes

    Globalization of Economic Activity

    • All nations are economically interdependent, and international trade is crucial to the global economy.
    • Economic interdependence is complex and its effects are uneven.
    • Interdependence reflects the historical evolution of economic and political orders and increasing integration of foreign countries.

    Waves of Globalization

    • The world has experienced several waves of globalization, with varying levels of openness.
    • The late 1800s saw a rise in world trade and high levels of openness.
    • The period between 1890 and World War II saw reduced dependence on trade and less openness.
    • After World War II, there was a significant increase in openness, driven by negotiated reductions in trade barriers.

    The United States as an Open Economy

    • The United States is heavily involved in international trade, with its top trading partners including China, Canada, Mexico, Japan, Germany, the United Kingdom, South Korea, and France.
    • In 2018, the total value of US trade with these countries was over $6 trillion.

    Common Fallacies of International Trade

    • Common fallacies about international trade include the belief that it causes job losses, lowers wages, and benefits only large corporations and wealthy countries, and that it exploits developing countries.
    • These claims are often misleading and overlook the many benefits of international trade.

    International Trade: Opportunity or Threat

    • International trade presents both opportunities and threats for firms and workers.
    • It can increase total productivity, lead to higher wages for exporters, and require a more educated workforce.
    • Jobs supported by exports reached over 10 million in 2016.

    Advantages of Globalization

    • Globalization can lead to faster productivity increases, faster growth in living standards, reduced inflation due to global competition, and increased job opportunities in exporting industries.
    • It promotes technological development and innovation through the exchange of ideas.
    • Unfettered capital movements provide access to foreign investment and low interest rates.

    Disadvantages of Globalization

    • Globalization can lead to job losses in import-competing industries, wage pressure on workers, and concerns about exporting jobs abroad.
    • It means that service and knowledge work jobs are increasingly threatened by outsourcing, and workers face competitiveness challenges due to more efficient production in low-wage countries.

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    Chapter 1: The International Economy & Globalization PDF

    Description

    This quiz explores the complexities of economic interdependence among nations and the historical waves of globalization. It highlights the significance of international trade and its varying levels of openness through history, particularly focusing on the role of the United States in the global economy.

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