Klevyer Unit 3 Week 1 10-1 Globalization PDF

Summary

This document is about globalization and its effects on sustainable prosperity for all people. It explores economic globalization, including the Bretton Woods Conference and the role of international organizations such as the World Bank and the International Monetary Fund.

Full Transcript

Unit 3 To What Extent Does Globalization Contribute to Sustainable Prosperity for All People? To What Extent Does Globalization Contribute to Sustainable Prosperity for All People? 2 10 Economic Globalization Which economic i...

Unit 3 To What Extent Does Globalization Contribute to Sustainable Prosperity for All People? To What Extent Does Globalization Contribute to Sustainable Prosperity for All People? 2 10 Economic Globalization Which economic ideas have most influenced the development of contemporary economic globalization? Focus: How money works - establishing a money system. World Bank and International Monetary Fund. Expansion of Free Market to Communist Countries in Europe. 4 5 Bretton Woods Conference After World War II, there was lots of The Allies (France, Poland, and the United damage, so countries needed to rebuild Kingdom, and the British Commonwealth) their economies were concerned about how to rebuild their economies after WWII Countries met in Bretton Woods, New Hampshire, USA, to discuss these problems In 1944, 44 countries signed the Bretton Woods Agreement ✗ This Agreement set up a system of rules for the global economy ✗ It also set up international organizations to look after the global economy 6 Bretton Woods Conference Bretton Woods Agreement: an agreement signed by the Allied countries in 1944 that established a number of financial institutions and a system of rules and regulations to promote international trade in the global economy Includes the World Bank, the International Monetary Fund (IMF) and the World Trade Organization 7 Countries That Attended the Bretton Woods Conference Canada Western Europe USA Japan Australia 8 New International Monetary System ✗ After World War II, there was a need to rebuild Europe. ✗ Allies met to set a standard that would rebuild the world. ✗ The Bretton-Woods Agreement was a set of rules that would set up the post-war economy 9 The Gold Standard ✗ All money that was printed had to be backed by the amount of Gold that a country had. ✗ If you have 200 million dollars in currency, a country would need to have 200 million dollars worth of gold to back it up. ✗ There was also a fixed-exchange rate, which is the value of money that is set by the government. ✗ What do you do when you need money? 10 The Problem Made Worse... ✗ There are times when countries need to borrow money or print it. ✗ By printing money you will incur more debt, and therefore you money will be worth less, and you will then have inflation. ✗ Inflation - easy definition, you have a lot of money, but its not worth the paper that it is printed on 11 Floating Exchange ✗ The Americans would change the program. ✗ Due to a lot of debt caused by different things (War/Social Programs), the US lifted the gold standard. ✗ When the most powerful country in the world drops the standard, many will follow. ✗ Floating exchange then is about supply and demand, when countries in the world want your currency and it becomes worth more. 12 The Value of Money ✗ Money is worth the value of the country and how powerful the economy is. ✗ Most countries will usually base their currency on the US dollar, as it is supposed to be the strongest currency in the world. ✗ But, then again, maybe that’s not the true story behind money at all.... 13 The World Bank ✗ Technically it is part of the United Nations, however it works independently for its 184 member states. ✗ Gives money to those countries that follow certain guidelines. ✗ Politically ✗ Democratically ✗ What is the problem posed by this criteria? 14 International Monetary Fund ✗ Works with the World Bank to help countries. ✗ Short term solution for countries, and helps to monitor exchange rates in the world. ✗ Gets money by quota based on the economy of the world countries. ✗ The quota is what the country will pay to the basic fund – the richer the country, the more it contributes. 15 Here’s How It Works.. USA - Largest economy in the world owes the world bank 17.5%. Palau - Smallest Economy in the world owes.001%. Operates much like a bank, money made from payments and interest. 16 End of Day Check In I can... ✗ Explain the unit question in my own words ✗ Explain the importance of the Bretton Woods Conference to contemporary globalization ✗ Explain monetary systems set up at Bretton Woods ✗ Explain why the World Bank and IMF were created 17 Complete the Worksheet from the beginning of Class 18 3.4 Economic Globalization The spread of capitalism Free MArket Expansion ✗ After the fall of the Iron Curtain in Eastern Europe, there was a huge demand for the Free Market. ✗ The old Centrally Planned Economy was government controlled, which is the opposite of Free Market (Grade 9 Social Studies) ✗ Other countries like India and China have 2/6 of the world’s population are looking towards the Free Market. 20 Think about it… What should the government do in times of an economic downturn? 21 Think about it… Should the government have given out CERB payments during the Covid pandemic? 22 John Maynard Keynes ✗ Government intervention needed ✗ Increase spending, money in people’s pockets, will spend more ✗ Ebb and flow of money but it is about balance of not too much, not too little. 23 Friedrich Hayek ✗ Government control in the economy means it is doomed to failure. ✗ Looked at the planned economies of Nazi Germany and the Soviet Union. ✗ Too much control hurts creativity in the population. 24 Pros and Cons ✗ Economies are very fickle and can change rapidly. ✗ Post World War II - there was a need of government intervention (especially in the Western World) to keep society safe and stable ✗ But now, how important is this safety in today’s world? Rap Battle Round 1 Round 2 https://www.youtube.com https://www.youtube.com /watch?v=d0nERTFo-Sk /watch?v=LA1-1DlhuXU& t=4s 26 End of Day Check In I can... ✗ Explain how capitalism spread to new countries ✗ Explain the ideas and economic perspective of two Bretton Woods economists 27 3.5 Economic Globalization Free Trade Free Trade and Globalization ✗ The world has expanded to a point where of the 193 countries in the world, 190 have signed trade agreements. Trade Liberalization Reducing barriers to international trade (most commonly accomplished through removing tariffs). Trade liberalization Trade goods 30 Tariffs Tariff: a tax on imports(buying) or exports (selling) 31 Free Trade Free trade is the result of trade liberalization. Free trade is when there are very few restrictions on international trade. 32 Trading Bloc Trading Bloc: A group of countries working together to give one another better trading terms Is Canada a part of a trading bloc? 33 General Agreement on Tariffs and Trade (GATT) ✗ UN agency (1947) ✗ All traders are to be equal ✗ Treat goods from your country the same as ones you are importing ✗ Protect through tariffs (tax on products to help ✗ domestic industries) ✗ Once in the GATT, a country is to try and lower its taxes on goods that are traded. The Free Trade Agreement (FTA) ✗ The Free Trade Agreement (1989) opened borders between the US and Canada. ✗ Canada looked to get into the American markets to export, and the Americans wanted the small, untapped Canadian Market. ✗ Let’s be honest, there is not that much that happened from that agreement, I never saw money in my pocket. North American Free Trade Agreement (NAFTA) ✗ This just added Mexico to the mix and there was an increase in trade between Canada, the US and Mexico. United States Mexico Canada Agreement (USMCA) ✗ Replaced NAFTA July ✗ North American vehicle 1st 2020. production was increased from 60 ish % - 75% made in NA ✗ Some changes are... ✗ Canada has more access to US dairy markets End of Day Check In I can... ✗ Explain characteristics of free trade and how it is achieved ✗ Describe various agreements regarding free trade and what their purpose it 38 3.5 Economic Globalization International Organizations World Trade Organization (WTO) Goal is to improve international trade relations Encourages countries to remove tariffs and other trade barriers Members must follow certain rules to be included. Being excluded makes trade very difficult. 40 The Group of 7 (G7) Made up of the most developed countries with the strongest economies Discuss economics and foreign policy Can use their influence because of their voting presence in world organizations 41 Think about it… What are positives that international organizations can bring to the economy? What are negatives that international organizations can bring to economy? 42 Choose Your Own Adventure Free Trade Subsidies WTO G7 43

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