Globalization & Economic Terms - Study
Guide
Economic Globalization
The increasing interdependence of world economies through the growth of cross-border
trade, investment, and the flow of technology and information.
Market Economy
An economic system where decisions regarding production, investment, and distribution
are based on supply and demand, with minimal government intervention.
Free Market Economy
A type of market economy where prices are determined by unrestricted competition
between privately owned businesses.
Free Trade
International trade left to its natural course without tariffs, quotas, or other restrictions.
Trade Liberalization
The removal or reduction of trade barriers such as tariffs and quotas to encourage free
trade between countries.
Tariffs
Taxes imposed on imported goods, making them more expensive to encourage domestic
consumption.
Sanctions
Penalties or restrictions imposed by one country (or a group) on another to influence
behavior, often related to trade or finance.
Foreign Investment
Investment by a person or company in one country into business interests located in
another country.
Privatization
The transfer of ownership of a business, enterprise, or public service from the government
to private individuals or organizations.
Outsourcing
The practice of hiring external companies (often in other countries) to perform tasks or
services that were previously done in-house.
Economic Growth
An increase in the production of goods and services in an economy over a period of time,
typically measured by GDP.
Knowledge Economy
An economy in which growth is dependent on the quantity, quality, and accessibility of
information and education rather than physical inputs.
Global Trade
The exchange of goods and services between countries worldwide. Impacts: Social (cultural
exchange), Political (policy alignment), Economic (growth, inequality), Environmental
(pollution, climate change).
Internal Agreements (USMCA, EU)
Trade agreements within specific regions to reduce barriers. USMCA: North American trade
deal. EU: European Union allowing free movement of goods, services, and people.
International Organizations
IMF: financial aid. World Bank: development funding. WTO: trade rules. OPEC: oil policies.
G7: developed nations' economic forum.
Transnational Corporations (TNCs)
Companies that operate in multiple countries, often with headquarters in one and
production in others.
Media Tech
Technologies that support global communication, news, and digital content sharing.
Transportation Tech
Innovations that improve movement of goods and people globally, like ships, planes, and
logistics systems.
Sustainability
Meeting present needs without compromising future generations' ability to meet theirs.
Sustainable Prosperity
Long-term economic and social well-being that respects environmental limits.
Resource Development and Agreements
Using natural resources governed by treaties or agreements to manage rights and profits.
Environmental Legislation
Laws aimed at protecting the environment from industrial and human harm.
Stewardship
Responsible management of the environment and natural resources.
Spirituality
Personal or collective values and beliefs about life’s meaning, often influencing views on
ethics and the environment.
Poverty
The state of lacking financial resources to meet basic needs like food, housing, and
healthcare.