7.7 Changes as a Result of the World Economy

Cards (103)

Trade imbalances occur when a country's imports and exports are not equal
What is a Multinational Corporation (MNC)?
A company in multiple countries
MNCs are sometimes criticized for labor exploitation. 
True
Match the impact of MNCs with its description:
Economic Growth ↔️ Creates jobs and stimulates economies
Environmental Degradation ↔️ Depletes resources and harms the environment
Tax Avoidance ↔️ Reduces revenue for host countries
MNCs introduce advanced technologies and management practices
Which factors influence global trade patterns?
Comparative advantage ||| Transportation costs ||| Trade agreements
Trade patterns reflect global economic integration.
True
MNCs stimulate local economies by bringing foreign direct investment
How do MNCs benefit local businesses in host countries?
Access to global markets
Multinational corporations introduce advanced technologies to host countries. 
True
What is one criticism of multinational corporations regarding labor practices?
Labor exploitation
Multinational corporations often use complex structures to avoid paying taxes
Why are multinational corporations central to understanding the global economy?
Drive global trade
FDI can stimulate economic growth by bringing in foreign capital and creating jobs. 
True
What is one potential drawback of FDI regarding environmental concerns?
Environmental degradation
The consequences of FDI shape the flow of resources, capital, and economic opportunities
What is one example of a trade agreement mentioned in the study material?
NAFTA
Global trade patterns reflect global economic integration
Multinational corporations contribute to economic growth by creating jobs and stimulating local economies. 
True
Match the benefit of MNCs with its corresponding criticism:
Economic growth ↔️ Labor exploitation
Technology transfer ↔️ Environmental degradation
Access to global markets ↔️ Tax avoidance
Foreign direct investment in developing countries can lead to the exploitation of workers
Economic integration refers to the process of eliminating trade barriers and coordinating economic policies
A Common Market allows for the free movement of goods, services, capital, and labor between member countries
True
Why are economic integration efforts important for industrial development?
Shape resource and capital flows
Global supply chains face challenges such as ethical concerns and environmental impacts
Match the advantage with the disadvantage of global supply chains:
Lower production costs ↔️ Risk of supply chain disruptions
Access to diverse resources ↔️ Ethical concerns regarding labor practices
Enhanced efficiency ↔️ Environmental impacts from transportation
Greater market access ↔️ Regulatory compliance complexities
Global competition from developing countries with lower labor costs is a key factor contributing to deindustrialization
Why is industrialization a key driver of economic growth in developing economies?
Creates jobs and diversifies economies
What are the economic benefits of industrialization in emerging economies?
Job creation and GDP expansion
Global trade patterns are influenced by factors like comparative advantage and transportation costs
What are the factors that can contribute to trade imbalances?
Exchange rates and production capabilities
What are Multinational Corporations (MNCs)?
Companies operating in multiple countries
MNCs may exploit workers in developing countries by offering low wages and poor working conditions 
True
What is the role of multinational corporations (MNCs) in the global economy?
Investing, producing, and selling goods across borders
MNCs introduce advanced technologies and management practices to host countries through technology transfer
MNCs may exploit workers in developing countries by offering low wages and poor working conditions. 
True
What structures do MNCs use to avoid paying taxes in host countries?
Complex financial arrangements
Why are MNCs central to understanding changes in the global economy?
They drive global trade and investment
FDI stimulates economic growth by creating jobs and bringing in foreign capital
How can FDI lead to labor exploitation in developing countries?
By offering low wages