This event occurred while the soviet empire was

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Unformatted text preview: Cold War The Cold War intensified after World War II and, most agree, ended with the visible fall of the Berlin Wall in 1989. This event occurred while the Soviet empire was beginning to crumble and many of the communist East European countries were breaking away from Soviet control. As some explain it, the end of the Cold War resulted in turning two different worlds (the capitalist and communist worlds) into one world. It resulted in a thawing of not only political but economic relations between former enemies. Why was this important economically? People are reluctant to trade with their enemies, but once that person or country is no longer your enemy, the barriers begin to fade away. The Cold War acted as a political barrier between certain groups of countries. Once it ended, one giant barrier standing in the way of trade was no longer there. In the past we traded exclusively with certain people, in certain countries. Today, with the movement toward globalization and worldwide free enterprise, we are more closely connected through trade with people all across the globe. In the past Today Section 2 Globalization 43 02 (030-053) EMC Chap 02 11/17/05 4:14 PM Page 44 Will Globalization Change the Sound of Music? ??? S uppose you had only 100 people to whom you could sell some good. Given this small number, if you want to sell something, you had better sell something that some of these 100 people want to buy. For example, if these 100 people don’t like fruit salad, then you better not produce and offer to sell fruit salad; if some of these 100 people like bread, then perhaps you should produce and offer to sell bread. Now increase the number of people from 100 to 1 million. Is it more or less likely that some people within a group of 1 million will like fruit salad, as compared to a group of 100 people? The answer is that as the size of the potential customer base increases, the number of things that you can sell increases too. In a world of 100 people, you can only sell bread; but in a world of 1 million people, you can sell fruit salad or bread. Now suppose you are a musician. As a musician, you can play different styles of music: jazz, pop, classical, hard rock, metal, hip-hop, and so on. If you are limited to selling your music to the people of a single state of the United States, there would be fewer styles of music you could offer to sell than if you could sell your music to the 44 people who reside in the United States. The general point is a simple one: the larger the size of the potential customer base (simply put, the more people you can possibly sell to), the greater the variety of goods we are likely to see. Globalization is, to a large degree, expanding everyone’s ability to potentially sell to more people. American companies aren’t limited to selling to only Americans; they can sell to others in the world too. Chinese firms aren’t limited to selling to only the Chinese; they can sell to others in the world too. As an example, consider some musician in the United States who is experimenting wi...
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This document was uploaded on 01/16/2014.

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