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Foundations of Economic Globalization

Foundations of Economic Globalization. Defined. Economics is the dimensions of life that concerns the production and exchange of goods, services, money and resources.

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Foundations of Economic Globalization

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  1. Foundations ofEconomic Globalization

  2. Defined • Economics is the dimensions of life that concerns the production and exchange of goods, services, money and resources. • Economic globalization is on a global scale. Goods from all over the world being available for purchase would be the most common example.

  3. Creation • A number of events led to the development of economic globalization as we know it today.

  4. World War IIThe End Was Near • By 1944 the Allied nations realized that Nazi Germany was not going to win the war. • Led by the U.S.A., these Allied Nations were becoming very concerned with rebuilding the Global Economy after WW II

  5. EuropePost WW II

  6. Bretton WoodsConference 1944

  7. Results of the meeting; • The signing of the Bretton Woods Agreement. • Established a system of rules, institutions, and procedures for the postwar global economy

  8. International Monetary System • A global network of institutions to promote international trade and the regulation of currency (money) among western countries.

  9. All printed money would be convertible to gold and could be cashed in at any time for gold A Gold Standard

  10. Fixed Exchange Rate Value of currency is set by a countries government Floating Exchange Rate 1976, worlds major currencies are valued on the foreign exchange market Exchange Rates

  11. The World Bank • Agency of the United Nations • Controlled by its 184 member nations • Provides loans to lesser developed nations • LDN’s must meet certain political and economic conditions

  12. International Monetary FundIMF • Agency of the United Nations • Funded through quotas (proportional shares) • Quotas are based on the relative size of a nations economy in the world economy • The U.S.A. contributes the most at 17.5%

  13. Free Market vs Centrally PlannedEconomies • The end of the Cold War in 1989 will led to the collapse of the Soviet Union and many of it’s satellite states. • These Eastern Bloc nations will try to embrace the free market economic system. • They will look to North America for assistance

  14. Free Market expansion to…

  15. During the Cold War there were only three major trading partners; North America, Western Europe and Japan

  16. Now the entire world is part of the global economy

  17. Technology & Communications • Borders are now irrelevant thanks to;

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