The 21st Century Global Economy Standard 2.19 , 3.1.6

Do Now

•Do you have an experience dealing with customer service/telemarketing from a person with a foreign accent? Explain why this kind of situation might occur?

Essential Question

•What impact is globalization having on the U.S. economy?

What is globalization?• Globalization: the new tendency of companies to move to

new areas across the world. Thereby increasing the interconnectedness of different peoples• Increase in trade• Exchange of different ideas and cultures (music, movies, religions)

Impact of Globalization• 1. Outsourcing (also called offshoring): moving production

overseas to places like India or China• Companies gain a comparative advantage in paying their works

less than U.S

Impact of Globalization• 2. Multinational Corporations: companies with

facilities/buildings in many countries• http://video.cnbc.com/gallery/?video=3000368225

Impact of Globalization• 3. Trade Agreements: an agreement between one or more

countries about investments and trade decisions• **NAFTA (North American Free Trade Agreement): agreement to

reduce and gradually eliminate tariff barriers between North American Countries

Impact of Globalization• 4. Horizontal Integration / Supply Chaining: when a company

absorbs and takes over other competitors. The decision is usually mutual as they save resources by merging their strengths. If left unchecked this would usually form a monopoly

30 Days Outsourcing Video• Complete Attached Questions

Do Now

•Explain outsourcing•What are multinational corporations?

Recap: Impact of Globalization• What impact is globalization

having on the U.S. economy?• The Good…• Advances in technology and

communication• Lower prices for consumers• People from across the world

have access to quality goods• The Bad…• Income inequality and job loss• Civil unrest / wars• Intense competition (could be

good)

Essential Question

•What impact do transitional economies have on the global and U.S. economies?

Transitional Economies • Transitional Economy: an economy

which is changing from a command economy to a free-market economy• Examples include: India & China

Transitional Economies

• Their impact includes…• 1. Increasing demand but also competition for

scarce resources (ex: oil, water)• 2. Providing new markets for goods that are

produced here in the U.S.• https://www.youtube.com/watch?v=SndgtT5rO7w

•

Transitional Economies

• Their Impact continued…• 3. Making the global market more competitive

for U.S companies• 4. Employment is increasing in transitional

economies, decreasing in others…

Case Study: China’s Transitional Economy•https://www.youtube.com/watch?v

=trs_udhjWqc•Vice News: Chinese Economic

Boom Turns to Bust?•How is China currently

transitioning?• If China has economic troubles what

does that mean for the U.S.A?