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Study Guide: Unit Test
Related Issue 3
To what extent does globalization contribute to sustainable prosperity for all people?
1. 20th Century World Events Shaping Economic Globalization
i. World War I
2. Economic Uncertainty after the war – production down
3. Income Tax
ii. The Treaty of Versailles
1. Government Economic Policies – Germany’s reparation payments
iii. The Russian Revolution
1. Changing Government Policies
a. Russian Revolution
b. Communism – USSR & Joseph Stalin
3. War – civil war
iv. The Great Depression
1. Changes in Investors’ Confidence
2. Natural Disaster – Drought
3. Economic Uncertainty – High Unemployment
v. World War II
vi. The Cold War
2. Key Ideas of Contemporary Global Economics
a. John Maynard Keynes
i. Argued against unrestricted capitalism and for government control of economies. Governments could provide to those citizens with relief and provide money to increase demand.
b. Friedrich Hayek
i. Mistrusted government control and argued that governments should not interfere in competition between businesses. Economy is healthy when there is competition.
c. Milton Friedman
i. At first agreed with the ideas of Keynes but then began to change his mind in the 1950s. He believed people would experience the greatest political and economic freedom when they are free to choose.
d. What is a market economy?
i. A market in which individuals are free to choose and make their own decisions without government intervention.
3. The organizations leading economic globalization
a. Bretton Woods
i. United Nations Monetary and Financial Conference
b. World Bank
i. Mapped out at the Bretton Woods Conference
ii. Supported by the United Nations
iii. Work to help expand international trade
iv. Lends money to nations in need for industrialization and economic progress, reduce poverty rates
v. Governs international trade
c. International Monetary Fund
i. Provides emergency short term loans
ii. Demands for reforms in countries to promote good governance and eliminate corruption.
iii. Promotes foreign trade
iv. Sets dependable international exchange rates to world currencies
i. Communism and applying market economy ideas
ii. Trade – dependency on foreign markets
iii. Environmental factors
5. Forces of Globalization
a. Changes to Commuications technologies
b. Trade – reshaping trade patterns
i. Developing nations beginning to trade with other developing nations.
i. Advertising encouraging the purchase of goods
i. Foreign owned factories within Mexico
ii. Offering jobs to help economy
iii. Jobs abuse lower worker standards and labour laws (women and children)
iv. Impact on environment
1. Weaker environmental laws
7. International Agreements and expanding globalization
a. World Trade Organization
i. Established to increase international trade by lowering trade barriers and trade...