Economics Notes Part 2 PDF

PART 2 ECONOMICS CLASS 15 Consumption : act of consuming or the use of something Distribution : way in which something is shared out Production : act or process of producing Exchange : act of giving one thing and receiving another Trade more freely, allow products to travel from one country to ano...

PART 2 ECONOMICS CLASS 15 Consumption : act of consuming or the use of something Distribution : way in which something is shared out Production : act or process of producing Exchange : act of giving one thing and receiving another Trade more freely, allow products to travel from one country to another, using tax/tariffs Distribution between USA, Mexico, Canada : called NAFTA, trade agreement Make a trading deal that doesn’t include tariffs Example orange juice from Florida, has good orange juice, is closer so transportation is easier, and politics (NAFTA agreement) But for the the rest of the world 50% of orange juice production is from Brazil Orange juice production there, pick from tree, manufacture juice (go to factory and squeeze juice out), use boats to transport orange juice (orange juice tankers), travel the world When gets to a country, have to meet regulations of country, take to a factory to process it, have to package it Fundamental questions an economist should answer : What goods are produced - Brazil has what it takes to sell oranges (they have the right climate) - For example Ikea (Sweden), have resources available an the right level of expertise How are they produced - What technology is available By whom are they produced Who are we producing for (who is the consumer) - Brazil orange juice is for people all over the world - Florida orange juice is for canadians, americans and mexicans How are they distributed Will tell you how well your economic system works and what type of economic system you have Producer : a person or organization that creates goods or provides services, farmers produce crops (becomes food so we can eat) , a service, teachers don’t produce knowledge, minister d’education is the one who produces education and the teacher is the tool who has the job to deliver the production of education, teacher has knowledge and expertise for job Capital (money) : all that is used to produce something Producers that create physical goods to sell their products to distributors such as retail and wholesale outlets, these outlets then sell their products to consumers, Consumer : person who buys goods an services When consumer is planning on buying smthn, two factors in decision, PRICE and QUALITY Consumers will compare prices and choose the least expensive item (if quality same) Quality, how well item is made and how long it is going to last Before hiring someone for a service, consumer often ask for an estimate Government is also a producer, it offers, goods and services, like police forces, social services, education, food surpluses, fighting departments In case of gov, consumer is the public, goods and services are bought with taxes , are monies paid to the government to fund its operation Private businesses also offer goods and services similar to those provided by gov Dif between gov and private services, reason for providing the goods or services and the ppl that benefit from the goods or services gov purpose = meet ppls needs, privates businesses purpose = make a profit Many produces create a wide variety of products, designed to meet needs of many ppl Some producers specialize → create only specific goods or services designed to meet specific needs Producers specialize so.. product can be the best it can be as all of the focus is on it, producer can develop good reputation by producing great product, some needs are so specific that only a company that specializes can meet that need ECONOMICS CLASS 16 Factors of production, NELC why we need 4 factors of produc? → in order to produce goods and services to satisfy needs and wants of consumers Natural resources, all the things that we find in nature without having to produce them - Fixed in supply (scarce, limited) - Cannot be renewed (if eat all fish, cant reproduce, once out, gone) - Example, oil, water, marine life, forests - Remuneration : rent (money we earn for what we have) Entrepreneurship, combines all the factors of production to produce goods and services - brings all the factors of production together in a profitable way - characteristics of an entrepreneur - trustworthy, enthusiastic, risk taker, professional, honest, hard working, energetic, passionate ties all other 3 together, helps to create a profitable business Labour, all the physical and mental effort used to create goods and services, physical labour involves using your body and physical ability and mental labour involves your mind and mental ability to get smthn done, example mineworkers and teachers - remuneration : wages or salaries - the mental and physical effort of people involved in a business (other definition) - workers that do all things physical and intellectual for a company Capital, capital goods used to produce other goods and services, also mean the actual money used to start a business - does not include money - manufactured resources, machines, tools and buildings (capital goods) - capital goods are needed to produce goods and services - intellectual capital tool is experience for education of the teachers, to teach us - remuneration ; interest Marketing channels In economics, want to do the best marketing for production Marketing = distribution Easier for producer to concentrate on own things to produce, since for example provigo ECONOMICS CLASS 17 Labor force: all people aged 15 (Canada) and 16 (USA0 and over who are either employed or actively seeking work, labor force grows due to pop growth and immigration Out of the labor force: those not working and not actively seeking employment People not eligible for work (inactive population) - Prisoners - Army - Young people - Seniors - Disabled Labour force usually 55% of western countries In Canada, little over 20 million expected to work (little over half of pop) Measuring unemployment, job of Statistics Canada, monthly unemployment rate calculated by : stats canada surveys 52,000 randomly selected households and categorizes each adult as: If currently employed (paying job) → person is employed if person has spent previous week at paid job If unemployed but actively seeking a job → person is unemployed if person is on temporary layoff, looking for job, waiting for start of new job Not in labour force , person in neither category is not in labour force Labour force , number of employed people PLUS number of unemployed Unemployment rate, U = [B/A+B)] x 100, u for unemployment rate, b for number of unemployed ppl, a+b for the labour force Labour-force participation rate, illustrates fraction of the pop that has chosen to participate in labour market, PR = [(A+B) / Population] x 100 → Unemployment rate and labour force participation rate go hand in hand but mean dif things Unemployment rate is inaccurately low as does not reflect, underemployed which are those who are working part-time when they want to work full time, and discouraged workers who are those who have given up work and report they are not longer in labour force when they act would be be willing to work is offered a good and stable job (ppl who dont look for a job bcuz feel they dont have the chance of getting one) → unemployment rate, not indicator of state of labor market, not be taken lit as a measure of fraction want to work but cant find jobs Liberal criticism, person who worked one day last month still counted as employed, someone who works part-time but wants to work full-time is considered as employed, true unemployment is higher than official rate → may understate true level of unemployment as does not include discouraged workers Conservative criticism, some go through the motions of looking for work to remind eligible for benefits, and arent act looking for work, big numbers of citizens/residents are illegal immigrants working in the underground economy, meaning they are not in the books, dont report their income and not counted as employed by stats book In general, unemployment rate higher for men than women, black and hispanics (other immigrants than white or asians), less educated ppl rather than higher-educated ppl, teenagers and young adults rather than older ppl Duration, when economy is growing, both unemployment rate and duration decrease, when economy stagnates or goes into decline, both unemployment rate and duration increase Unemployment (may change) as their can be ; job leavers (quit to seek other opportunities 6%), job losers (laid off/fired 63%), new entrants (first-time job seekers 8%), reentrants (left work force but returned 23%) ECONOMICS CLASS 18 - Frictional, in between (jobs) - Seasonal, when job is specific to a season - Structural - Cyclical, (demand deficient) Frictional unemployment Unemployment that occurs when people take time to find a job, brief periods of unemployment experienced by people moving between jobs or into the labour market Switching jobs, just finished school, left labour force and trying to return (mothers on maternity leave) - Have the knowledge and education, easy to find other job, is your choice - Job search period is quite short as they have adequate skills Seasonal unemployment Unemployment that occurs due to seasons Ski instructor in the winter (cannot be this in winter), construction business in summer (hard to do this in winter) Seasonal and frictional unemployment are linked together (if ski instructor, season ends in april, meaning in april you are in between jobs) Structural unemployment Workers skills do not match the jobs available, out of work for a relatively long period of time Causes of this : development of new tech, discovery of new resources, changes in consumer demand, globalization, lack of education (CAUSED BY economic restructuring making some skills obsolete) Steelworkers and coal miners who are out of work because coal mines have closed, typists who have been made obsolete due to the invention of computers, functionally illiterate who are shut out of workforce → 2-3% of labor force always structurally unemployed) Cyclical unemployment Unemployment that changes with business cycles - Demand for products decreases to workers are laid off - Results in an excess supply of workers for the remaining available jobs - Economy must grow at least as fast as labor force to avoid cyclical unemployment Natural rate of unemployment, rate of unemployment to which econ tents to return in long run Target rate of unemployment : lowest sustainable rate of unemployment that policymakers believe is achievable under existing conditions, best we can do is 5-6%, as structural, frictional and cyclical play a factor Natural rate of unemployment = frictional + structural (usually 5 or 6%) Cyclical unemployment = natural + cyclical Full employment, not a characteristic of a strong economy, will leads to some efficiency, strong economy need 4-6% of unemployment bcuz this is the natural rate of unemployment - Push and help the economy to work well, fiscal policy - Gov has job to make money have value, monetary policy ECONOMICS CLASS 19 Debt and gov spending, which is fiscal policy Watch fear the boom and bust, keynes vs hayek for better explaining of economics Keynes suggests that economy should be left alone mostly, gov should only help by spending money Federal (and other levels) make fiscal policy through the budget Fiscal policy: government decisions on spending and taxation that are intended to improve or maintain the economy , because gov is so large and has such an impact on business, the decisions it makes has HUGE influence on the economy (heart of the modern economy) Federal budget, written document that indicates the amount of money the government expects to receive for a certain year and authorizes the amount of money the gov can spend that year. Every Fiscal Year (12 month period, not necessarily from jan to dec) gov make a new budget, may ass to it through supplementary budgets from time to time Total level of gov spending can be changed to help increase or decrease output of econ Expansionary policies, policies that try to INCREASE output of econ Contractionary policies, policies that try to DECREASE output of econ During contraction or recession, gov can do two things → decrease taxes OR increase spending Decreasing taxes, ppl have less money to spend, less money means less demand, less demand means lower inflation (favored by conservatives CAN / republicans USA, let ppl decide what to spend their money on, let those who earned money benefit from it) Increasing spending, less money in econ, less money means less demand, less demand means lower inflation (favored by liberals CAN / democrats USA, gov should spend to redistribute wealth to poor, rather than give rich ppl tax cut) Problems with fiscal policy → Usually unpopular to raise taxes or cut gov spending, elected officials worried abt re-election rarely do either → If gov cuts taxes, means have less money to spend, go into debt, could results in extreme cases like country going bankrupt Fiscal Policy alters GDP prices levels through gov purchases, taxes and transfer payments Budget deficit → when gov spending exceeds tax revenue (fr goods and services and transfer payments) Budget surplus → when tax revenues are greater than gov spending Balanced budget → where gov expenditures equal tax revenues → in Can, federal gov follows practice of running at least modest deficit, large deficits in recession years Fed gov policy, budget ought to be roughly balanced over business cycle, running surpluses in good times, and offsetting deficits in bad times When gov wants to stimulate econ by increasing aggregate demand will , increase gov purchases of goods and services, increase transfer payments, lower taxes or use combination of three, all will increase budget deficit (reduce budget surplus) which is called expansionary fiscal policy 2010, 39% of fed gov spending = social concerns, transfer payments for post-secondary education and healthcare up to 15%, 13% of fed budget goes towards debt account, military spending = 11% Gov spending will be positive, effects of increased gov spending will be seen via Multiplier effect GDP will change any time amount of any one forms of purchase (consumptions, investment, gov purchases or net exports) changes, if ppl decide to purchase more in any of these categories out of given income, aggregate demand will shift rightward Multiplier effect → when initial increase in purchases of goods and services by gov occurs, ultimate increase in total purchases will tend to be greater than initial increase EXAMPLE : Part of additional income will be spent on additional consumptions purchases, paid in additional taxes incurred becuz of income, and saved, measured by marginal propensity to consume (MPC) Total impact of initial increase in purchases after all rounds of additional purchases and income have occurred = multiplier equal to 1 divided by minus marginal propensity to consume ECONOMICS CLASS 19 FISCAL POLICY Gov spending and policies may be a great solution to stimulate economy, also to increase the well-being of its citizens, this costs money and gov must find this money somewhere else, they find it through taxes, gov investments and valuables income, debt ppl pay taxes, are an obligation Complicated bcuz feels like an obligation and not easy, need to know where to put numbers in computer program, cuz nowadays online, essential part of life Fiscal policy, gov decisions on spending and taxation that are intended to improve or maintain the economy , because gov is so large and has such an impact on business, the decisions it makes has HUGE influence on the economy (heart of the modern economy) Tax is defined as a compulsory contribution levied on persons, property, or businesses, for the support of gov for economic and social operations, money paid to a gov to fund its programs and services, dont pay taxed means you get in trouble (jail) Jean Jacques Rousseau, made the social contract, deal between gov and pop of country, only way that a society is gonna work well, both sides of deal have to do their job, ppl choose leaders (gov) give power to do stuff, give them legitimacy, accept and respect they are the gov, we give them the resources so gov can do stuff gov has to protect us and give us a good quality of life (education, food) → en gros, need taxes, bcuz part of social contract and gov needs money to help us BENEFITS in Canada Public transport, infrastructure, education, healthcare, free concerts, museums, festivals, law enforcement, defence, ect - Helps redistribute wealth to lower-income fams, charities, students, retirees, ppl with disabilities, and provides social services like Old Age Security benefits, Employment Insurance benefits, Canada Child Benefit payments, ect Factors that define a TAX SYSTEM (everything related to taxes are decisions) Who pays the tax (income tax) → residents and citizens living here in Canada for more than 6 months, LIVING IN, companies in Canada (considered ppl), when buying smthn, children under 12 no pay The base to be taxed → if you make less than 15,000 (no pay tax) Rates of tax to be applied to the base → the more money you make, the more money you pay, less salary means less percentage taxes General exemptions → first nations (dont pay tax on income), veterans, soldiers, basic products (dont include taxes like milk), gambling General deductions → when given to charity, pay check (employer takes out money from salary and gives it to gov) Other selective measures such as how to pay tax → ask gab Value and nature of these characteristics→ how much revenue is generated, how fair tax system is, tax systems ability to generate growth Tax system needs to be structured, so everyone at specific econ level gets same tax treatment, no matter how they earn income, ppl at higher econ level have to pay larger share of taxes, than those with lower level, system needs to be neutral, so taxes dont affect gov econ decisions (like where is spends its budget every year) Self assessment (Canadian tax system is based on this), considered the most economical and efficient way to collect income tax, non-residents with Canadian income and Canadian residents responsible for making sure they have paid their taxes according to Income Tax Act, based on this approach, fairness and efficiency of federal income tax system depend on both CRA and taxpayer Types of taxes in Canada (to federal gov, ottawa) Income tax, annual tax collected from individuals and businesses by the CRA (Canada Revenue Agency, gov office that collects taxes) for the federal gov and the provinces and territories, amount on individual must pay based on amount of his/her taxable income (money earned minus allowed deductions) for tax year Employment Insurance (EI), deduction from salary or wages, if become unemployed may be entitled to El benefits Canada Pension Plan (CPP), pension plan that provides with some income in retire, employers may also deduct contributions of the CCP Provincial sales tax (PST), tax collected in most provinces whe smthn is sold Goods and services tax (GST), federal tax collected by CRA, charged on sale of most goods and services in Canada, at a consistent rate of 5% → Harmonized sales tax (HST), in some provinces, GST combined with provincial sales tax where both collected together Corporate tax, assessment levied by gov on profits of a company, rate of corporate income tax paid by business varies between countries, since corps are legal entities distinct from their owners and operators, are typically taxes as if they were ppl Decreasing taxes, gives ppl more money to spend, more money=more demand, more demand=more production, more production=more jobs, more jobs=more demand, ect. Increasing taxes, ppl have less money to spend, less money=less demand, less demand=lower inflation Other sources of revenue for gov, rail company, post company, radio quebec, savings bonds Fed gov debt, when gov borrows to finance a budget deficit causes interest to rise, crowds private investment reaching capital formation, budget surplus adds to national saving and lowers interest rate which stimulates private investment and capital formation Many years, gov ran continuous budget deficits which built up large fed debt, could simply print money (would lead to high inflation, plus undermines confidence in gov), usually budget deficit is financed by issuing debt, gov borrows amount necessary to cover deficit by issuing bonds (payable typically at some maturity date like 5-10-15-20years) Sum total of values of all bonds constitutes the fed debt, tendency of fed gov to engage in budget deficits, led to increasing fed debt over time Crown corporation, head of state is the king Charles (other type of gov income) - Owned by Can fed, provincial or municipal govs Businesses only job, to make profit, function is to provide special service and products to public (Bank of Canada, Canada Post, CBC) Reason of creation includes, promote essential services, econ development, canadian culture and identity But for example hydro quebec is not main goal to make profit, richest company in canada, in the world, goal to help us the ppl for electricity and water - Natural monopolies, hav status as distinct legal persons, privatization recent trend, provide services private sector wont offer (low profits) ECONOMICS CLASS 20 Monetary Policy (right value of money) and Exchange Rate Policy (how gov taxes you and spends money) – bonds = obligations `value of 5 dollars , piece of paper, value of the money = monetary policy, not abt collecting and spending the money If too much money flying around, loses value, If not enough around, hard to get so can't buy things Economy only works if ppl buy stuff, needs demand (from class before??) Monetary policy influences the economy through changes in the financial system’s reserves (coffre du gouv fr example) that influence the money supply and credit availability in economy Has value of 5 dollars bcuz in coffre du gouv, enough to back this up (back up piece of paper that says 5 dollars) Objective of monetary policy – preserve value of money by keeping inflation low, stable and predictable, allows canadians to make spending and investment decisions with more confidence, encourages long-term investment in canadas economy, contributes to sustained job creation and greater productivity, leads to improvements in standard of living If inflation, reserves of country went down, value of dollar bill going down, prices look like prices went up but value of money has gone down, leads to improvements in our standard of living Inflation control target, 3%, in order to keep this inflation percentage must do monetary policy correctly Monetary policy, macroeconomic tool to control aggregate economy Fiscal policy, controlled by gov directly whereas monetary policy, controlled by central bank in Canada Central bank is a type of banker’s banks, conducts monetary policy and acts as financial adviser to gov, in some countries central bank part of gov, in Can not part of gov (is a Crown corporation, not under day-to-day direct control of fed gov) - Head of Bank of Canada, Governor of bank (Tiff Macklem), has had ten governors Price stability, often been goal of monetary policy, interpreted to mean a low and stable rate of inflation Design and implementation of monetary policy, affected by international considerations, exchange rates play critical role in this process Exchange rate – expresses value of one currency in terms of value of another, tells us how many of units of one currency is needed to buy one unit of another, matter bcuz international trade is imp part of econ (monetary policy imp as will affect international trade through changes in money supply) Exchange rate as relative price of one nation’s currency, depends on how much of that currency in circulation, so monetary policy cannot be set without considerations of international issues Exchange rates are ; links between the domestic and world economy Impact of exchange rates ; If currency appreciation, domestic prices increase relative to foreign prices, exports (less competitive) , imports (more attractive)  If currency depreciation, domestic prices fall relative to foreign prices , exports (more competitive) , imports (less attractive) Foreign exchange market intervention ; official purchases and sales of currencies through the central banks to influence homme exchange rate Goal of intervention → to alter demand for one currency, by changing supply of another Bank of Can responsible for, conducting monetary policy, providing central banking services, issuing bank notes, administering public debt, buying&selling foreign currencies Bank reserves are IOUS of Bank of Can, banks reserves are either vault cash or deposits at Bank Monetary base ; currency in circulation plus deposits at Bank (by controlling monetary base, Bank can influence amount of money in econ and activities of banks) From vid (not watched) Every country has a central bank European central bank, bcuz most country use the Euro Central bank doesnt take order from the gov, there to make sure economy works well Crown company, not to make profit, but to provide a service, crown means royalty How is price of a currency determined , smarter with money video Price of a currency is dependent on demand and supply Speculations play a role in determining the price of a currency Political and economic conditions of the issuing country affect price of currency ECONOMICS CLASS 21 Inflation, value of our money when down, as we buy less stuff Inflation : state of persistent/constant rise in prices (inflation is when prices are going up, not when prices are up), is a process of rising prices and not a state of high prices Inflation is the rate of change in the price level, if price level in current year is ‘P1’ and in previous year is ‘Po’, then inflation for current year is (P1-Po)/Po X 100 If inflation is 100%, things cost the double and if inflation is 200%, will be the double of the double, anything over 25% inflation is a problem Inflation is a state of disequilibrium at which aggregate demand exceeds aggregate supply at existing prices, which causes a rise in general price level Sometimes an inflationary situation does not exhibit increases in the price level, if price controls and rationing are introduced by the gov → called suppressed inflation As soon as these controls are withdrawn, prices start rising and inflation becomes an open inflation Gov covers the extra costs → subsidy Some economists (Keynes and classical economics) assert that inflation is caused by increase in demand in a situation of given aggregate supply → demand inflation Classical economists (Adam Smith) → increase in demand is caused by an increase in money supply, ppl find themselves with more money which means they are most likely to spend it, they are found with more money ppl gov produces it Keynes → increase in total spending and not in money supply which is responsible Causes and theories of inflation Inflation related to supply and production, group of economists contend that inflation is caused by an increase in cost production that results in a fall in aggregate supply → cost-push inflation Other believe that inflation results from an amalgamation of demand and cost elements → mixed inflation Inconsistent price and wage markups, can generate endless wage-price spiral in absence of increase in productivity of labour , prices are fixed by applying some standard mark-ups over cost of direct materials and labour and wages are also administered on basis of a fixed markup over cost of living of working class , inflation generated by mark ups applied by business and labour is called mark-up inflation Theory of mark-up inflation, based on concept of income inflation This inflation arises from efforts of dif econ groups to increase or maintain their real incomes by raising their monetary incomes, during periods of full employment With output not being raised if one group tries to raise its share while other groups attempt to maintain their real income, then prices tend to rise Demand-Pull inflation ; originates from demand side of economy If aggregate monetary demand for domestic output exceeds value of full employment output at current prices, price level will rise Cost-push inflation ; originates from supply side of economy Caused by rising cost of production independently of the excess demand in market Six causes, that leads us to spend more Spending more only good, if demand and supply can keep up at the same level, most of these say that demand goes faster in demand, which will lead to inflation Consumption (consumer society) → if quick increase in consumption and investment along with an extremely confident businesses, will be arise in aggregate demand Exchange rate (ex. dollar value goes down) → depreciation of exchange rate increases price of imports, reduces price of country’s exports, consumers will buy fewer imports while exports grow, rise in aggregate demand Government spending (ex. stimulate econ) → vast increase in gov spending, drive up aggregate demand Expectations (ex. better buy now before prices grow) → expectation that inflation will rise, often leads to rise in inflation, workers and firms will increase their prices to catch up to inflation Monetary growth (ex. because of covid, ppl have saved money and now have too much) → excessive monetary growth, when theres too much money in system chasing too few goods, price of good will grow Types of cost-push inflation Wage-push inflation ; cost inflation stemming from trade union pressure on wage rate (ex. Unions want higher salaries) Profit-push inflation ; inflation caused by monopolistic practices of managers of firms who increase prices, even in absence of increase in demand or rising costs (ex. Air Can flights to iles madeleine) Deflation ; condition of falling prices on account of insufficient effective demand, results in continuous fall in level of economic activity and growing unemployment Disinflation ; process of lowering costs and prices when are excessively high, brings down inflationary trend in prices without causing unemployment Reflation ; moderate degree of inflation that is deliberately undertaken to relieve depression Stagflation ; situation where high rate of inflation prevails simultaneously with high rate of unemployment or stagnant economic condition, combination of inflation and stagnation (ex. venezuela) Effects of inflation , effects of on production, income distribution and other Control of inflation, monetary, fiscal and other measures ECONOMICS CLASS 22 Globalization (trade, imports, exports) Globalization: Increased flow of trade, people, investment, tech, culture, ideas among countries and creates a more integrated (linked, coordinated) and interdependent (defend of each other, need each other, if smthn happens on canada→will affect other parts of world as well) Has been around since 15th century, when European exploration and colonization created global empires and markets, today is special car extent of interdependence, and speed at which has occured Two factors underlie globalization, decline in barriers to the free goods, services and capital, occurred since the end of world (much more trade since WW2, bcuz of decline in barriers, means more globalization), technological change (better tech) 1920s, 30s, nations erected formidable barriers to international trade and foreign direct investment, advanced industrial nations of west committed themselves after WWII to removing barriers to free flow of goods, services, capital between nations (lowering trade barriers, increased volume of world trade) GDP, gross domestic product, total production of a country More trade/globalization, more global production, more economic growth More trade means we will produce more→everyone happy in end Role in technology, lowering of trade barriers made globalization possible, tech has made it a transforming movement Globalization acceleration of trends in last years, rise in agriculture 10,000 yrs ago (led to rise of empires, nation-states) , science and enlightenment after 1600s produced (global trade and empires) ECONOMIC ; To have more trade, agreements between countries, can, mex and usa made system to create more free trade→NAFTA, political agreement, between 3 govs to have more economic trade, european union has same thing, economies are increasingly linked together WTO , policing world trading system, ensuring nations adhere to rules established in WTO treaties IMF, maintains order in international monetary system, provides loans Multinational corporations (for example produce in canada, but sell in usa) Cultural globalization (for example rappers in countries not in usa or canada, rap in english to become more popular in usa, get records, very americanized rap culture) consumerism (people want more than they need) cultural lines have bcom blurred, as world bcomes more connected (cultural imperialism) , lots of americanization Global interactions in culture (sports started in one country like footy in england to all over with world cup, colonial nationalists emphasized playing footy to generate national identity) , ART ASWELL Global institutions , UN association of countries, work to facilitate international peace, security, friendly relations among nations, solving problems , World Bank fight poverty, by promoting econ develop among developing countries