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GNED 07 Lesson 2

The document discusses economic globalization and different types of economies including traditional, command, market, mixed, socialist, and capitalist. It also covers trade barriers such as tariffs, quotas, embargoes, subsidies, standards and regulations used to restrict or regulate trade between countries as well as policies around protectionism and trade liberalization.

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Melgeri Aubrey E. Ungos
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© © All Rights Reserved
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24 views

GNED 07 Lesson 2

The document discusses economic globalization and different types of economies including traditional, command, market, mixed, socialist, and capitalist. It also covers trade barriers such as tariffs, quotas, embargoes, subsidies, standards and regulations used to restrict or regulate trade between countries as well as policies around protectionism and trade liberalization.

Uploaded by

Melgeri Aubrey E. Ungos
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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GNED 07 – CONTEMPORARY WORLD QUOTAS

Limits on the amount of goods that can be imported into a


Lesson 2: country. Quotas are often used to protect domestic industries
ECONOMIC GLOBALIZATION from foreign competition, and to ensure that domestic
It refers to the spread of trade, transportation, and producers have a certain share of the market.
communication systems on a global scale in the interest of
promoting international commerce. EMBARGOES
Prohibitions on the import or export of certain goods or
TYPES OF ECONOMIES: services, often for political or security reasons.
TRADITIONAL ECONOMY
This type of economy is based on customs, traditions, and SUBSIDES
beliefs that have been passed down from generation to Financial support provided by the government to domestic
generation. People produce and consume goods and industries to make them more competitive. Subsidies can take
services based on what has worked well in the past. the form of direct payments, tax breaks, or other types of
incentives.
COMMAND ECONOMY
In a command economy, the government controls all aspects STANDARDS AND REGULATIONS
of production and distribution of goods and services. The Rules that are put in place to ensure that imported
government decides what goods and services are goods meet certain quality or safety standards. Standards and
produced, how much they are produced, and how they are regulations can be used to protect consumers and the
distributed. environment, but they can also be used as a form of
protectionism to restrict imports.
MARKET ECONOMY
In a market economy, the decisions regarding what goods and ECONOMIC SYSTEM POLICIES
services are produced, how much they are produced, and PROTECTIONISM - protecting one’s economy from foreign
how they are distributed are made by the buyers and sellers competition by creating trade barriers.
in the marketplace. Prices are determined by supply and - North Korea having very limited trade agreement to other
demand. nations. They have established trade barriers that make
their economy inaccessible to almost every country.
MIXED ECONOMY
A mixed economy combines elements of both market and TRADE LIBERALIZATION - reducing trade barriers to make
command economies. In a mixed economy, the government international trade easier between countries.
may regulate certain industries, provide some public goods - the Philippines which has a very open border for trade
and services, and also allow for private enterprise. agreements in different countries, makes it easier for us to
do international trading among other nations.
SOCIALIST ECONOMY
In a socialist economy, the means of production are owned PROTECTIONISM OR TRADE LIBERALIZATION?
and controlled by the state or the community as a whole. The WHICH DO COUNTRIES CHOOSE?
goal is to create a society that is more equal and fairer. Since the world we are living in is more globalized, countries
tend to choose or have trade liberalization more than
CAPITALIST ECONOMY protectionism.
In a capitalist economy, the means of production are owned
and controlled by individuals or private companies. The goal TARIFFS OUTSOURCING
is to create wealth and maximize profits.

TRADE BARRIERS - measures that governments use to restrict


or regulate the flow of goods and services between countries.

TYPES:
• TARIFFS
• QUOTAS
Tariffs are taxes that are the practice of hiring a
• EMBARGOES
placed on imported goods company or individual outside
• SUBSIDES
to make them more of the home country to
• STANDARDS AND REGULATIONS
expensive for consumers perform work that could be
TARIFFS to buy. However, tariffs done in-house. Outsourcing
Taxes that are placed on imported goods to make them more can also protect local can lead to lower costs for
expensive for consumers to buy. Tariffs can be used to protect industries and workers companies, which can be
domestic industries from foreign competition, and to from being undercut by passed on to consumers in the
generate revenue for the government. cheaper imports. form of lower prices.

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