The characteristics of the Global economy Objective 7.10

Key Questions: What are the basic characteristics of the Global economy? Objective 7.10

is the buying and selling of goods & services among all nations GLOBAL ECONOMY is the buying and selling of goods & services among all nations

Why do we have a Global economy? countries are dependent on each other for resources & goods/services. This has created global cooperation & nations all around the world exchange with one another

Why do we have a Global economy? There are 3 factors economists use to explain today’s global economy: 1-Specialization 2-Interdependence 3-Technology

SPECIALIZATION Nations specialize in the production of certain goods, services or resources

example: Arab countries – oil Costa Rica – bananas Japan - technology SPECIALIZATION example: Arab countries – oil Costa Rica – bananas Japan - technology

is the reliance of countries on one another for INTERDEPENDENCE is the reliance of countries on one another for products, services, resources

INTERDEPENDENCE Imports-The goods/services and resources brought into the US from other countries

INTERDEPENDENCE Exports-The goods/services and resources traded to other countries from the US

Role of Technology New technology is responsible for the huge growth of the global economy

Role of Technology Increases the flow of information Connects nations separated by distance Makes international business easier Makes production faster and easier

Example: Internet, cell phones, satellite, airplanes, computers TECHNOLOGY Example: Internet, cell phones, satellite, airplanes, computers

of international trade Obj. 7.11 Assess the costs and benefits of international trade KQ- what are the + and – of the global economy?

BRAINSTORM! What do you think are the +\- of international trade

Benefits (Advantages) of international trade

BENEFITS (Advantages) Each country is able to get goods and services they may not be able to produce

BENEFITS (Advantages) Goods and services can be bought at a lower prices

BENEFITS (Advantages) Goods and services produced in the U.S. can be sold to consumers in other countries

BENEFITS (Advantages)

BENEFITS (Advantages) A wider variety of goods is available to each country

BENEFITS (Advantages) Specialization promotes efficiency and economic growth in all markets

COSTS (Disadvantages) of international trade

COSTS (Disadvantages) Increased competition among producers world wide could hurt U.S. producers’ profits

COSTS (Disadvantages) Loss of jobs G/S may be cheaper to produce in other countries, increasing profits for companies Companies decide to outsource U.S. jobs

COSTS (Disadvantages) Relocation of companies Cheaper labor and production causes U.S. producers to relocate factories

Is global trade more beneficial or costly to the US economy? People argue that the global economy hurts the US economy by taking jobs away from American workers. Others say that global trade helps by providing goods/services we cannot produce in the U.S. and allows for cheaper prices. What do you think? Is global trade more beneficial or costly to the US economy?