Economic Study Notes
Year 12 Chapter Summaries: The Global Economy
-Headings
-Definitions
-Important
-Factors
-Facts/examples
Chapter One: Introduction to the Global Economy
1.1 The Global Economy
• The global economy refers to the integration between national economies and the increased impact of international influences on all aspects of life and economic activity.
• We live in a global economy where the economies of individual countries are linked to each other and changes in a single economy can have ripple effects on others.
• After the Great Depression in the 1930s, there was a reduction of links resulting in reductions on trade and other economic links. However in the late twentieth century efforts to reverse the retreat of nations towards self-sufficiency were widespread.
• Great Depression of 1930s had a global impact- experienced an economic downturn.
• Major indicators of integration between economies/ globalisation:
➡International trade in goods and services
➡International financial flows
➡International investment flows and transnational corporations
➡Technology, transport and communication
➡The movement of workers between countries
1.2 Globalisation
Trade in Goods and Services
• Trade in g+s is an important indicator of globalisation because it is a measure of how goods and services produced in an economy are consumed in economies internationally.
• Trade has grown rapidly in recent decades increasing from $US8.7 trillion in 1990 to
$US53trillion in 2012.
• Gross World Product (GWP) refers to the sum of total output of g+s by all economies in the world over a period of time.
• Annual growth in the value of trade has been consistently around twice the level of world economic growth- highlighting the greater volatility of trade compared with gross world product. • High volume of global trade reflects that economies do not produce all the items they need, or do not produce them efficiently as other economies, and have to import g+s.
• New technology
-Headings
-Definitions
-Important
-Factors
-Facts/examples
Chapter One: Introduction to the Global Economy
1.1 The Global Economy
• The global economy refers to the integration between national economies and the increased impact of international influences on all aspects of life and economic activity.
• We live in a global economy where the economies of individual countries are linked to each other and changes in a single economy can have ripple effects on others.
• After the Great Depression in the 1930s, there was a reduction of links resulting in reductions on trade and other economic links. However in the late twentieth century efforts to reverse the retreat of nations towards self-sufficiency were widespread.
• Great Depression of 1930s had a global impact- experienced an economic downturn.
• Major indicators of integration between economies/ globalisation:
➡International trade in goods and services
➡International financial flows
➡International investment flows and transnational corporations
➡Technology, transport and communication
➡The movement of workers between countries
1.2 Globalisation
Trade in Goods and Services
• Trade in g+s is an important indicator of globalisation because it is a measure of how goods and services produced in an economy are consumed in economies internationally.
• Trade has grown rapidly in recent decades increasing from $US8.7 trillion in 1990 to
$US53trillion in 2012.
• Gross World Product (GWP) refers to the sum of total output of g+s by all economies in the world over a period of time.
• Annual growth in the value of trade has been consistently around twice the level of world economic growth- highlighting the greater volatility of trade compared with gross world product. • High volume of global trade reflects that economies do not produce all the items they need, or do not produce them efficiently as other economies, and have to import g+s.
• New technology