lease define and understand what all these concepts mean) apter 1: The U.S. in a
ID: 1138693 • Letter: L
Question
lease define and understand what all these concepts mean) apter 1: The U.S. in a Global Economy and Chapter 2: ternational Economic Institutions Since World War I International Economic Integration/Economic Globalization What does this mean? o 3 pillars of economic globalization: . Trade . FDI o FDI (Freign direct M-estine) F.Caitalega direct maestrnet ) . Why is it beneficial? o Protectionism (3 main forms) - Tariffs . Quotas . Non-Tariff Barriers o Multilateral Organizations . IM ·World B GATT ·UN o Free Trade Agreements - RegionalArth Examples: NAFTA and EU Why so controversial? o Benefits of Economic Integration o Benefits vs. Costs of Trade Capital
Explanation / Answer
Globalization means connecting all countries on the basis of trade. There are several advantages for the countries by this globalization. Mainly the exports and imports will happen in between the countries so the friendly relations or fraternity will develop in between the countries OR group of countries. If the relations are good in between the countries then the disputes and wars will not happen in the world. So, each and every country promoting the peace. If all the countries maintain good relations then the economic position is also improved for all the countries and developed countries also do the economical help for poor countries. Any country opted for globalization then there are more advantages had like the mentioned above.
Let us discuss the 3 pillars of economic globalization.
Those are-
Let us discuss one by one the above pillars.
1. Trade: Trade means do exports and imports from one country to another country by simple trade tariffs. Trade is the main important role in the part of globalization. Suppose the countries America and India stepped into a trade.
Let us see the example”
America needs to do an export of oil 50 barrels to India. Here, India needs to bear the trade tariffs so the trade will go well then the relations also become strong in between the America and India. Further these countries will may assistance to each other.
Now a days, each and every country doing the trade with all the countries in the world because of the Globalization. It is really a good sign for the developing OR under developing countries in order to improve their economy.
2. FDI: FDI means Foreign Direct Investment. Suppose the country India achieved a good GDP (Gross Domestic Product) for the year 2017 as it is 7.2% approximately. So, every country thinks about the future of India and they want to invest the amount in different sectors as in the basis of FDI in Indian country. The country is also allowing the FDI’s and invest in all the sectors of the country. Once the countries economy is well rocked then the profits given back to the Investors. If any countries economic position is glittering in the international market then all the countries attract and do FDI’s in their respective country.
Really, the countries have a great opportunity to improve their infrastructure and update their sectors in advanced mode by the foreign countries.
3. Capital: Capital refers to the financial wealth of the individual country and whole countries in the world. If the country is participating well in the international market then the financial wealth will be improved. If the country is maintaining their financial wealth well then all the other countries will maintain friendly relations with this country.
Let us see the example:
The X country had a population of 3 million who enable to come under working age. The country is proving the jobs to all the persons then their GDP will be increased well in every year. Once they achieved a good GDP ultimately other countries will do FDI’s in the respective country. However, if the country is financial wealth then only it has a chance to explore in the international markets.
We have discussed so many important points of about the 3 pillars of economic globalization. The part of the functions like Trade, FDI and Capital are really playing a very key role in the globalization.
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