HSC ECONOMIC TEXT BOOK..TOPIC 1 SUMMARIES

HSC Economic Topic One Summary

Globalization refers to the increasing economic integrating amidst countries pencil lead to the emergence of a global trade place to a single market, where countries argon becoming progressively linked by common technologies and the customization of goods and function marketed and distributed on a global rather than depicted object base

Gross World Product is defined as the total market value of good and services produced by all countries at a given time

Futures of Globalization

- change magnitude trade in good and services between nations, leading to a increase in World Gross Product

- The consolidation of national monetary systems to create a world system

- engineering plays a greater role in linking trade between nations

- Internationalization of labour

- Rapid liberalization of the global trading environment

- increase importance of TNC, where increasing conducting trade and investment across national boundaries

- Increased importance of global originations eg. WTO, IMF

The main drivers of globalization argon technology, economic liberalization and consumerism

The major cost of globalization is that omit of international controls over capital investments which evoke lead to destabilizing guess and the volatility of short term capital flow. This has lead to the increase scope for contagion where a crisis in one monetary market or delivery spreads to others causing regional and steady global stability eg.



The Asian financial crisis in 1997

Two types of shocks can be transmitted from the international economy to the domestic economy:

- Real shock refers to changes in real variables including world output, commodities outlay and technological change eg. oil which caused stagflation(inflation and unemployment occur at very(prenominal) time)

- Financial or monetary shock refers to changes in financial variables. Such as international share prices. Financial shocks are transmitted more quickly than real shocks through changes in asset price and...

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