1. GLOBALIZATION
Globalization- process by which national economies, politics, cultures and societies become integrated with those of other nations. Started during Age of Exploration.

2. Major effect: economic interdependence Dependence of countries for goods, resources, knowledge, and labor from other parts of the world. MNC- Multinational corporations are businesses with headquarters in one country and production facilities in another country. Primary agents of globalization.

3. Outsourcing is practice of a multinational corporation to relocate a piece or all of its manufacturing operations to factories in other countries. Some MNCS: Walmart, Disney, Blizzard/Activision, McDonalds, Electronic Arts, Red Bull, IKEA, Honda, Ford. LIST OF MNC

4. Globalization leads to world markets connections
Globalization leads to world markets connections. Can cause issues 1997 financial crisis in Thailand happened and it spread throughout Asia banking crisis in US caused global shock waves. Wealthy nations had to help bail out troubled economies. Developing countries had issues because of demand for goods decreased and less funds to help them

5. Oil prices Good Globalization Bad Globalization
Oil needed for transportation, plastics and pretty much anything else you can think of.
1973 OPEC raised prices and cut exports of oil which led to crisis in world economies.
2008 oil prices shot up because China and India demand for oil increased.

6. Borrowed money hurts developing nations
Borrowed money hurts developing nations. 1980s bank interest rates rose as world economy slowed. Demand for goods fell in developing nations. Poor nations could not pay their loans. Rich nations hurt as well as they were stuck with a bunch of bad debt. Banks stepped in and forgave or lowered interest rates to help stimulate the world economy.

7. EFFECTS OF GLOBALIZATION
- Crisis in one region can now have major effects on world. -poor nations need to borrow capital from rich nations to modernize. When they can’t pay back debt both rich and poor nations are hurt.
Global and poverty

8. INTERNATIONAL ORGANIZATIONS AND TREATIES
UN- deals with many issues
World Bank-gives loans and advice to developing nations
International Monetary Fund (IMF)-promotes economic growth.

9. The World Trade Organization (WTO)-tries to ensure trade runs smoothly and freely. Opposes protectionism-the use of tariffs to protects a country’s industries from competition.
Groups called regional trade blocks promote trade within regions: EU, NAFTA, APEC
These all promote global interdependence

10. COST AND BENEFITS OF GLOBALIZATION
Greater variety of goods and services Global comp. lowers prices People in industrialized nations benefit from changes: health care, education, technology, communication Many free trade countries become democratic states.
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11. Critics: poverty main focus. Claim: rich countries exploit poor ones
Critics: poverty main focus. Claim: rich countries exploit poor ones. Raise debt and lower living standard of poor. Some say it is IMF, World Bank fault. Many people see the USA as one of the main perpetrators. Feel that too rapid economic growth decreased stability and sustainability

13. DEVELOPMENT PATTERNS
Process of improving material condition of peeps through the growth and diffusion of technology and knowledge. Every place, regardless of size exists at some level of development.

14. More Developed vs Less Developed Countries
More Developed Countries (MDC) are on the wealthier side of the development spectrum. Less Developed Countries (LDC) are those on the economically poorer side of the spectrum. Both groups of countries have related challenges, with MDCs facing issues like economic growth and LDC’s trying to improve their economic condition.

15. Country’s development level based not just on how much money it has but also includes factors related to education and health care development.

16. TOP TENS MDC LDC Norway Afghanistan Australia Angola Netherlands
Bangladesh
United States
Benin
New Zealand
Bhutan
Canada
Burkina Faso
Ireland
Burundi
Liechtenstein
Cambodia
Germany
Central African Republic
Sweden
Chad

17. Gross Domestic Product (GDP)
Value of total outputs of goods and services produced by in a country usually over one year. GDP per capita is simply the GDP divided by the pop. In MDCs the GDP per capita is usually greater than 20,000 and LDCs is often less than 1,000.

18. GROSS NATIONAL PRODUCT (GNP)
Includes all goods and services owned and produced by a country overseas. GDP and GNP cited as poor measures of development levels because they fail to provide information on factors such as the distribution of wealth, the dev. of health care and education and the degrees of gender equity in the country.

19. Purchasing Power Parity
PPP is measuring tool for calculating the exchange rate required for each currency to buy an equal amount of goods. Allows economists to make “apple to apple” comparisons among GDP and GNP data. Example: GDP per capita in sub-Saharan Africa is eval of PPP shows that it is about in US currency.

20. Informal sector
Country’s economy that includes all business transitions that were not reported to the government. Unregistered street venders and day laborers as well as prostitutes and drug traffickers. Country’s GDP does not include informal sector transactions.

21. Informal sector exists for several reasons:
meeting a demand that is not fulfilled in the
formal sector
may be so inexpensive that vendor can’t make enough profit to buy perm store and transition into formal sector
Also illegal immigrants risk deportation if they or their employers report their earnings to the gov.

22. UN Human Development Index- An Alternative to the GDP to Measuring Development
HDI- formula used by the UN to measure a country‘s development level and compare it to other regions and countries on the rank-ordered list of countries.
HDI based on the ideas that human dev. is a process of expanding choice for more peeps, thus pushing countries to improve their education, welfare, health care, and economic systems to include more educational opportunities for more peeps.

23. HDI uses gross domestic product, life expectancy, educational level attained and literacy rates to estimate a country’s development level and rank it on the list of countries.
The high score on the HDI is a lowest is

24. The Development Gap
Is the widening difference between development levels in the MDCs and LDCs. MDCs are improving in their development levels faster than are LDCs. In last decade the GDP nearly tripled in MDCs but only doubled in the LDCs. The rate of pop increase fell by nearly 85% in MDC’s but by less than 5% in LDCs.

25. The North-South Gap
Refers to the pattern that MDCs are located primarily in Northern Hemisphere
LDCs are located mainly in the Southern Hemisphere.
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