Global Economic Topic

1. FAIR USE NOTICE AND DISCLAIMER
This power point presentation may contain
copyrighted materials, the use of which has not
been specifically authorized by the copyright
owner. The power point presentation in the form of
lecture operates under assumption that this is not
for profit use and for educational purposes only on
the web constitutes a “fair use” of the copyrighted
materials as provided copyright law of Philippines
by virtue Republic Act No. 8293 otherwise known as
Intellectual Property Code of the Philippines

2. CONTEMPORARY
WORLD
“GLOBAL
ECONOMY”

3. What is Global Economy?
 The global economy refers to the
interconnected worldwide economic activities
that take place between multiple countries.
 It refers to the exchange of goods and services
between different countries, and it has also
helped countries to specialized in products
which they have a comparative advantage in.

4. What is Economic Globalization?
 Economic globalization refers to the
increasing interdependence of
world economies as a result of the growing
scale of cross-border trade of commodities
and services, flow of international capital
and wide and rapid spread of technologies.

5. Global Economy has different level of
Analysis
 MACRO
• Macroeconomics is the branch of economics that deals with the structure,
performance, behavior, and decision-making of the whole, or aggregate,
economy.
• The two main areas of macroeconomic research are long-term economic
growth and shorter-term business cycles.
• Macroeconomics in its modern form is often defined as starting with John
Maynard Keynes and his theories about market behavior and governmental
policies in the 1930s; several schools of thought have developed since.
• In contrast to macroeconomics, microeconomics is more focused on the
influences on and choices made by individual actors in the economy (people,
companies, industries, etc.).

6. MESO
 Mesoeconomics or Mezzoeconomics is a neologism
(coinage) used to describe the study of economic
arrangements which are not based either on the
microeconomics of buying and selling and supply and
demand, nor on the macroeconomic reasoning of
aggregate totals of demand, but on the importance of under
what structures these forces play out, and how to measure
these effects.
 It dates from the 1980s as several economists began
questioning whether there would ever be a bridge between
the two main economic paradigms in mainstream
economics, without wanting to discard both paradigms in
favor of some other basic methodology and paradigm.

7. MICRO
• Microeconomics studies the decisions of individuals
and firms to allocate resources of production,
exchange, and consumption.
• Microeconomics deals with prices and production in
single markets and the interaction between different
markets but leaves the study of economy-wide
aggregates to macroeconomics.
• Microeconomists formulate various types of models
based on logic and observed human behavior and test
the models against real-world observations.

8. Basic Concepts of Microeconomics
• Utility theory: Consumers will choose to purchase and consume a combination
of goods that will maximize their happiness or “utility,” subject to the constraint
of how much income they have available to spend.
• Production theory: This is the study of production—or the process of
converting inputs into outputs. Producers seek to choose the combination of
inputs and methods of combining them that will minimize cost in order to
maximize their profits.
• Price theory: Utility and production theory interact to produce the theory of
supply and demand, which determine prices in a competitive market. In a
perfectly competitive market, it concludes that the price demanded by
consumers is the same supplied by producers. That results in economic
equilibrium.

9. What is International Trade?
• International trade is the exchange of goods and services
between countries.
• Trading globally gives consumers and countries the
opportunity to be exposed to goods and services not
available in their own countries, or which would be more
expensive domestically.
• The importance of international trade was recognized early
on by political economists like Adam Smith and David
Ricardo.
• Still, some argue that international trade actually can be
bad for smaller nations, putting them at a greater
disadvantage on the world stage.

10. Who are the key players in
globalization?
• Multinational corporations are one of the actors in globalization. ...
• Small businesses and entrepreneurs are also one of the major players
in economic globalization. ...
• World Trade Organization which negotiates and enforces international trade
agreements.
• Government which regulates businesses and commerce.

11. What is NAFTA and WTO?
 What Is the North American Free Trade Agreement (NAFTA)? The North
American Free Trade Agreement (NAFTA) was implemented to promote trade
between the U.S., Canada, and Mexico. The agreement, which eliminated most
tariffs on trade between the three countries, went into effect on Jan. 1, 1994.
 The objective of WTO is to ensure that trade flows as smoothly, predictably
and smoothly as possible. Some of the other objectives of WTO are: To lower
trade barriers between nations and its people. The purpose is to help
producers of goods and services, exporters, importers conduct their business.
 164 members since 29 July 2016

12. “THANK YOU”