The 21 st Century Global Economy Standard 2.19, 3.1.6

Do Now Do you have an experience dealing with customer service/telemarketing from a person with a foreign accent? Explain why this kind of situation might occur?

Essential Question What impact is globalization having on the U.S. economy?

What is globalization? Globalization: the new tendency of companies to move to new areas across the world. Thereby increasing the interconnectedness of different peoples Increase in trade Exchange of different ideas and cultures (music, movies, religions)

Impact of Globalization 1. Outsourcing (also called offshoring): moving production overseas to places like India or China Companies gain a comparative advantage in paying their works less than U.S

Impact of Globalization 2. Multinational Corporations: companies with facilities/buildings in many countries

Impact of Globalization 3. Trade Agreements: an agreement between one or more countries about investments and trade decisions **NAFTA (North American Free Trade Agreement): agreement to reduce and gradually eliminate tariff barriers between North American Countries

Impact of Globalization 4. Horizontal Integration / Supply Chaining: when a company absorbs and takes over other competitors. The decision is usually mutual as they save resources by merging their strengths. If left unchecked this would usually form a monopoly

30 Days Outsourcing Video Complete Attached Questions

Do Now Explain outsourcing What are multinational corporations?

Recap: Impact of Globalization What impact is globalization having on the U.S. economy? The Good… Advances in technology and communication Lower prices for consumers People from across the world have access to quality goods The Bad… Income inequality and job loss Civil unrest / wars Intense competition (could be good)

Essential Question What impact do transitional economies have on the global and U.S. economies?

Transitional Economies Transitional Economy: an economy which is changing from a command economy to a free-market economy Examples include: India & China

Transitional Economies Their impact includes… 1. Increasing demand but also competition for scarce resources (ex: oil, water) 2. Providing new markets for goods that are produced here in the U.S.

Transitional Economies Their Impact continued… 3. Making the global market more competitive for U.S companies 4. Employment is increasing in transitional economies, decreasing in others…

Case Study: China’s Transitional Economy v=trs_udhjWqc v=trs_udhjWqc Vice News: Chinese Economic Boom Turns to Bust? How is China currently transitioning? If China has economic troubles what does that mean for the U.S.A?