Aim: How does economic interdependence affect countries around the world? Do Now: Current Events Presentations Have you ever traded part of your lunch for a part of someone else’s lunch? Why? Homework: Continue working on Current Event Presentations – refer to schedule

Do Now: Have you ever traded part of your lunch for a part of someone else’s lunch? Why?

Economic Interdependence At the beginning of the twenty-first century, the world was divided over a number of political, cultural, and economic issues. Despite divisions, countries tied together like never before Globalization is force behind closer relationships Process in which trade, culture link countries Improvements in transportation, communication make global trade easier Globalization Major effect of global trade, increased economic interdependence Relationship among countries in which they depend on each other for resources, goods, services Occurs because countries vary in goods, services they provide, need Interdependence

Economy Goods, services nation provides and needs depend on the level of economic development in that country Countries grouped in two categories: developed, developing Developed Industrialized nations have strong economies, high standards of living 20 percent of world’s nations wealthy, powerful like Japan, United States Have access to good health care, education, technology Developing Less productive economies, lower standard of living; Guatemala, Philippines People in these countries lack adequate education, health care Poorest, least-developed countries located mostly in Africa, southern Asia

Growth and Outsourcing Multinational Corporations Increasing interdependence and dramatic growth of multinational corporations—large companies operating in multiple countries

Growth and Outsourcing Benefits to companies Outsourcing—having work done elsewhere to cut costs, increase production Manufacturing facilities in developing countries, where materials, labor relatively inexpensive

Growth and Outsourcing Advocates say: creates jobs and wealth in developing countries Critics say: fails to improve standard of living, outsourcing causes job loss in company’s home country

Global Economic Ties Global Economic Ties Certain events, actions can affect economies of many nations Global interdependence particularly evident in times of uncertainty Early 2000s, price of crude oil rose dramatically Factors: rising world demand, concern over available supply Oil Prices All countries depend on oil for energy; rise in prices felt around world Developed countries like United States faced with higher costs Poor nations in Africa could not afford to import, faced shortages Rise in oil prices led to increased demand for alternative energy sources, attempts to reduce consumption

How does economic interdependence affect the world? Sum It Up!!!! How does economic interdependence affect the world? Answer(s): helps to provide jobs in developing countries, increases production and decreases cost for multinational companies