Globalization: Characteristics, Markets, and Impact
Characteristics of Globalization
Globalization is the ability to use technology to exchange and communicate goods and services between two or more nations. Example: Making a product in China and selling that product all over the world.
Globalization of Markets
The globalization of markets means that nations are not constrained to their own borders; they are now all connected. Example: Buying products online that are produced all over the world.
Globalization of Production
This means that companies can
Read MoreKey Economic Concepts: GDP, GNP, and Market Dynamics
Understanding Key Economic Concepts
Circular Economy Flows
Describe the two flows of the circular economy. The actual flow of goods and services and of factors other than monetary.
GDP vs. Personal Income
Compare GDP to personal income. The GDP is determined by the sum of consumption, investment, public spending, and exports. Personal available income is the sum of income.
GDP vs. GNP
What is the difference between GDP and GNP? GDP is the value of all final goods and services produced in a given country
Read MoreUnderstanding Inflation: CPI, Demand, and Structural Factors
Consumer Price Index (CPI)
The Consumer Price Index (CPI) measures the average change in prices of all goods and services purchased by consumers throughout a country. It is obtained by survey and becomes an indicator of the loss of purchasing power of money, i.e., the need for more money to maintain the consumption level before the price increase. That is why it is the most popular indicator.
The CPI is obtained as a weighted arithmetic average of the rates of different groups of goods that form the
Read MoreKey Economic and Political Terms of the Early 20th Century
Key Economic Terms
- Inflation: A general rise in prices due to an increase in the amount of money in circulation and uncontrolled emissions, often seen in warring countries. This leads to the depreciation of money.
- Gold Standard: An international monetary system in force until the 1930s. It provided that the currencies of all countries belonging to this system were exchangeable for a set amount of gold.
- Recession: A period of economic decline in a country, during which the value of money decreases.
- Fordism:
Understanding Mergers and Acquisitions: Types and Purposes
Mergers and Acquisitions: An Introduction
Mergers and acquisitions, or M&A for short, involve the process of combining two companies into one. The goal of combining two or more businesses is to try and achieve synergy – where the whole (new company) is greater than the sum of its parts (the former two separate entities). (A + B) > (A + B)
The two processes are different: A merger occurs when two separate entities combine forces to create a new, joint organization. Meanwhile, an acquisition
Read MoreInternational Trade Models and Their Implications
Theories that will be considered are:
- The Heckscher-Ohlin model of trade
- An economy of scale model of trade
- A product differentiation model of trade
- A transportation cost model of trade
- An environmental standards model of trade
The Heckscher-Ohlin Theory
The Heckscher-Ohlin theory is based on two subsidiary theorems:
- The H-O nation will export the commodity whose production requires the intensive use of the nation’s relatively abundant, and therefore cheap, factor and import the commodity whose production