Using your knowledge and understanding of economic theory, discuss some advantages and some risks of globalization. Assess the arguments for and against floating exchange rates, and the arguments for and against fixed exchange rate. …
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Explain what a Monetary Union is and indicate possible benefits of the regime. Globalisation is a broad term used to denote the merger of the world’s various economic systems. The primary agents of change are reductions in barriers to trade such as import quotas, export fees and tariffs. The base contention related to justify globalisation is that it aids in increasing material wealth as well as goods and services through an efficient process of international division of labour. Globalisation is also used to describe how regional economies, cultures and societies are becoming increasingly integrated through trade, transportation and communication. Economic globalisation can be specified better if seen as the integration of national and regional economies into the global economy. The salient features of this integration are FDI (foreign direct investment), migration, trade, capital flows, technology and military presence. (Bhagwati, 2004) Globalisation like most other international phenomenon has had positive and negative consequences. This text will attempt to analyse the positive and negative aspects of globalisation in terms of economics by utilising relevant economic theories. This will be followed by a discussion on floating and fixed exchange rates and the text will end with an appraisal of the monetary union concept. Economic Globalisation Economic globalisation is dependent on achieving a common global market that is based entirely on the freedom to exchange all nature of services and goods. (Lorenz & Wagner, 2007) Another major consequence of globalisation is that employees have to compete in an international job market. Previously wage regulations were more in sync with national economies while the advent of globalisation has changed this altogether. As economies are more and more intertwined, the failure of an individual economy does not necessarily jeopardise worker’s wages. This has affected the distribution of wages and income on a large scale. (Reich, 1992) The new global market is highly competitive and productivity must be upgraded in order to face the competition. The removal of trade barriers and tariffs ensures that competition is head on and multi faceted simultaneously. Quality and cost need to be monitored at the same time and there are large chances that industry may fail if faced with too stiff competition. Industries must upgrade their technology as well as the product range in order to compete. (Croucher, 2004) However, the failure of individual economies does present the chance for a domino effect. One failing economy may spur failure elsewhere and the entire global market may collapse. The recent economic recession is a glaring example of such a phenomenon. Some schools of thought contend that globalisation does present obvious problems through rapid development but globalisation is a positive force which has the power to lift a nation out of poverty. Rapid development spurs a virtual economic cycle which produces faster economic advancement. (Bhagwati, 2004) Globalisation presents blue collar workers in developing nations with far greater occupational choices than before. Educated workers from developing nations are given chances to compete internationally for better paying jobs. Workers from developing nations are able to compete with workers from industrialised nations at an advantage. This aids in creating greater opportunities for workers. Workers are provided with opportunities to emigrate and getting jobs in industrialised countries or to stay in their native countries to work in outsourced industrial ventures. The global economy also provides abundant opportunities for products of cottage industries too. (Bhagwati, 2004) On the other hand, globalisation has
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“Internationization Of Economies Essay Example | Topics and Well Written Essays - 1750 Words”, n.d. https://studentshare.org/macro-microeconomics/1430308-internationization-of-economies.
Why do Economies Grow? Economies grow as a result of the increase in Gross Domestic Product (GDP) of a country which is an outcome of the increase in labor as well as capital. These were the fundamental economic indicators that influence the economic growth of a country, as per the mathematical model developed by the MIT economist Robert Solow (Hardesty, 2011).
The aim of intervention has a positive side that enables a person to directly confront their changed opinions in a less threatening way and how they actually react to these self-destructive behaviours, affecting them and the people around (Edwards et al., 1995).
Globalization is widely facilitated and influenced by technological developments both in North and in the South (Bradshaw, 2010). Economic globalization is a new concept whereby firms in advanced economies have increasingly extended their trading activities to all corners of the globe.
Inquiries with regards to the advantage of enduring a monarchy have also overwhelmed Sweden. The royal family unit is still sturdily sustained, and has worked intimately with the Social Democrats to transform the state of Sweden's economic aspects. Hesitancy over the nation's function within the political as well as economic incorporation of Europe instigated Sweden not to adhere to the EU until 1995, as well to decline the opening of the euro during 1999.
If it is low or competitive to that of the rival companies, then the firm will make a good business. So how a company will be successful in reducing the price of its products so as to get a larger share of the market The most popular strategy is by mass production or by growing in its size so that there is optimum utilization of its fixed resources thereby reduction in the average cost of production.
In this regard, it is very eager to make an analysis about the company and its competitive context by taking in to account the product range, competitive strategy and market structure. Similarly, competitive strategy in a business
One strongly agrees with the contention given that world economies have evidently shown strong interconnectedness. The optimistic patterns have been revealed to be driven by America’s economy (Why optimism may be bad news). With the perception
Thus, the problem is how to identify what should get produced and how the production factors are to get allocated. The economy revolves around possibilities and methods that can solve this key economic issue. The problem is caused by two facts mainly; unlimited human
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