_j78iprdfp_Recorded-Lecture---Module-3

Chapter 1: Introduction to the Structures of Globalization

• Learning Outcomes:

  • Analyze actors facilitating economic globalization

  • Articulate stands of global economic integration

  • Explain the role of international financial institutions in creating a global economy

  • Comprehend attributes and roles of global economy and market integration

• Key Term Definitions:

  • Structures of Globalization:

    • Represents the frameworks and processes within globalization.

    • Essential for understanding the complexities and mechanisms of global economic interactions.

  • Market Integration:

    • Occurs when prices of goods across different locations follow similar patterns over time.

    • Demonstrated through the proportional movement of related goods in different markets, indicating economic relationships.

    • Example: Establishing wholesaling facilities or adding production plants to foster integration.

  • Global Corporation:

    • A company operating in multiple countries, unlike firms confined to one or few countries.

    • Examples: Nestle, Procter and Gamble.

  • Lender of Last Resort:

    • Provides emergency credit to struggling financial institutions.

    • Example: The Central Bank (BSP) in the Philippines, preserving monetary and banking stability.

• Influences on Global Economy and Market Integration:

  • Government:

    • Policymakers and implementers advocating for globalization

  • Global or Multinational Corporations (MNCs):

    • Active players in international markets.

  • Global Institutions:

    • Organizations like the United Nations supporting cooperation and economic policies.

Chapter 2: The Global Supply Chain

• Global Economy Overview:

  • Represents the interconnected economic activities worldwide, focusing on goods and services expressed in monetary terms.

  • The Importance of Global Economy:

    • Events in major economies, like the US, influence global markets significantly.

• Key Term: Foreign Direct Investment (FDI):

  • Investment made by individuals or firms in one country into business interests in another.

  • Influential in shaping the global economy, with pros (diversified portfolios, financing) and cons (ethical issues, strategic industry impacts).

• Economic Systems:

  • Open Markets:

    • Examples include the US, Canada, and Australia, allowing unrestricted investment participation.

  • Closed Markets:

    • Examples: Brazil, Cuba, North Korea.

  • Colonialism's Effect:

    • Historical acquisition of control over territories limits equitable economic development.

Chapter 3: Mixed Economic System

• Definition of Colonialism:

  • Control of one nation over another for economic benefit, resulting in inequality and structural issues.

• Changing Economic Structures:

  • Advances in transportation and technology along with innovation in multinational corporations drive change.

  • Variations in economic focus:

    • From labor-intensive to capital-intensive and finally to human-intensive products.

• Philippines' Economic System:

  • Described as a mixed economic system blending capitalism and socialism, protecting private property while allowing government intervention.

Chapter 4: Types of Economic Systems

• Traditional Economy:

  • Guided by historical traditions and customs focusing on agriculture and barter trade.

  • Examples: Bhutan, Haiti.

• Command Economy:

  • Government owns production and distribution, controlling economic processes.

  • Examples: Cuba, North Korea.

• Market Economy:

  • Focuses on consumer interactions determining pricing and availability of goods and services.

  • Commonly seen in the Philippines.

Chapter 5: Global Market Integration

• Global Market Integration Defined:

  • Achieves similarity in prices of goods across countries, minimizing differences.

  • The Law of One Price:

    • Identical commodities must have the same price in different markets, disregarding the location.

• Market Imperfections:

  • Identifies types of market failures, including monopoly, monopsony, oligopoly, and monopolistic competition.

• Migration and Market Integration:

  • Serves as a primary method to incorporate underdeveloped regions into the global economy.

Chapter 6: Supply and Demand Concepts

• Microeconomics:

  • Studies individual and firm resource allocation focusing on demand and supply curves.

  • Law of Demand and Supply:

    • Demand decrease with price increase; supply increase with price increase.

• Elasticity:

  • Measures responsiveness of quantity demanded or supplied to price changes.

• Opportunity Cost:

  • Represents the loss incurred by choosing one alternative over another, grounded in the concept of scarcity.

Chapter 7: Conclusion

• Trade-Offs and Economic Decisions:

  • Examines the concept that pursuing one choice often sacrifices another, underlining the necessity of weighing options.

• Competition in Economics:

  • Focuses on the necessity of competition for economic health, differentiating types of competition: direct, indirect, and phantom competitors.

• Competitive Advantage Explained:

  • Refers to factors that enable firms to produce better or more cost-effectively than rivals.

• Consumer and Business Confidence:

  • Influences spending behavior in economies, as seen during unpredictable events like economic downturns.