Costs of globalization include increased income

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Unformatted text preview: l contributed to the growth of globalization. Benefits of globalization include greater trade, increases in standard of living, lower prices, and growing innovation. Costs of globalization include increased income inequality, greater corporate power, and lost jobs for some people. 52 Chapter 2 Economic Systems and the Global Economy To reinforce your knowledge of the key terms in this chapter, fill in the following blanks on a separate piece of paper with the appropriate word or phrase. 1. A(n) ______ is an economy based on customs and beliefs that have been handed down from one generation to the next. 2. A(n) ______ is an economy with a mixture of capitalist and sot elements. 3. A(n) ______ is the way in which a society decides what goods to produce, how to produce them, and for whom they will be produced. 4. ______ is an economic system in which individuals (not government) own most, if not all, the resources and control their use. 5. ______ is an economic system in which government controls and may own many of the resources. 6. The ______ is the way all the income earned in a country is divided among different groups of income earners. 7. A(n) ______ is a government program specifying economic activities, such as what goods are to be produced and what prices will be charged. 8. ______ refers to the integration of economic activities across (national) borders; a phenomenon by which economic agents in any given part of the world are affected by events elsewhere in the world; the extension of the division of labor and specialization beyond national borders. 9. Karl Marx and Adam Smith each had a ______, or a certain way of looking at and explaining the world. 10. The ______ states that any value in produced goods comes from the labor used to produce those goods. 11. Work done for a company by people other than the company’s employees is called ______ if the people doing the work live in a country other than the country in which the company is located. 02 (030-053) EMC Chap 02 11/17/05 4:14 PM Page 53 Understanding the Main Ideas Solving Economic Problems Write answers to the following questions to review the main ideas in this chapter. Use your thinking skills and the information you learned in this chapter to find solutions to the problems described below. 1. What is an economic system? What are the two major economic systems in the world today? 2. List three ways in which free enterprise (or capitalism) and som are different. 3. According to Adam Smith, why do the butcher, brewer, and baker provide us with our dinner? 4. How would Marx respond to Smith’s claim that self-interest is vital to the workings of a productive economy? 5. Identify and explain each of the three causes of globalization. 6. By how much (per year) has globalization affected U.S. income? 7. Is there greater income inequality in the world today than, say, 100 years ago? Explain. 8. Might globalization benefit some residents of a country more than others? Explain your answer. 9. Why might it be easier for an in...
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