EVALUATION:

Answer all questions legibly and comprehensively. Instructions on when and how submission
takes place will be made in the group chat.
GLOBALIZATION
1. Define globalization based on your understanding?
Globalization is, without a doubt, the most essential factor of our period. This
refers to the acceleration of global activities and trades. Integration and disintegration,
unity and war, order and conflict are all the result of a dynamic interaction of forces.
Globalization had the effect of promoting and increasing relations between various areas
and cultures around the world. Globalization methods, as a whole, provide enormous
potential for stability, harmony, and democracy.

2. When did globalization begin? Explain how it became a phenomenon.

Most people believed it began in 1492 with Columbus' journey to the New World.
Immigrants came to local and distant locations long before Columbus' journey, trading
thoughts, goods, and traditions along the way. Maybe the most likely the best early
example is the Silk Road, an ancient network of trading routes that ran through China,
Central Asia, and the Mediterranean between 50 B.C.E. and 250 C.E. The Silk Road
trade, like future globalization booms, relied heavily on emerging technology.
Breakthroughs in metallic materials contributed to the invention of coins; advancements
in technology led to the construction of roads linking the main empires of the time; and
expanded agricultural productivity allowed for more food to be transported between
locations.

3. What has led to improvement of globalization?

For such a number of years, the global economy has been profoundly highly
interrelated. Nevertheless, the phenomenon of globalization has intensified in recent
years, leading to a number of causes, including improved trade, greater labor and
economic growth, and technological improvement.

4. What are some positive effects of globalization?

When people buy local resources, goods, and services, they put wealth and
foreign exchange into their economies. The additional funds generated by this investment
will be used to improve schooling, health, and infrastructure. People and societies
exchange thoughts, perceptions, and ways of life. People will try foods and items that
were inaccessible in their home countries.
Globalization raises awareness of activities occurring in far-flung corners of the
globe. People may become more aware of environmental problems such as deforestation
and global warming as a result of globalization, and they may be more aware of the need
for sustainability.
5. How does trading between two countries benefit both sides?
All sides benefit from trading. Every country has little resources and is unable to
generate all that everyone desires. Countries specialize in manufacturing goods where
they have a market edge in order to profit from trade. The advantage of a country in
producing a specific good is obtained by comparing the opportunity cost of producing
that product in both the countries involved in international trade. The country that has a
low opportunity cost in producing any good as compared to the other country will be the
exporter of that good.
Each nation will benefit from lower opportunity costs of the other by trading. The
opportunity cost helps in determining the limit of the terms of trade. This means that
rather than making something for themselves, they focus on the products that they can
produce at a reduced potential cost than their competitors. As these items are traded,
customers in each of these countries prosper from having access to a wider range of
products at cheaper costs.

6. What are some negative effects of globalization?

The world economy has undergone drastic changes as a result of globalization.
However, it has a number of negative effects. The most notable of which are ethnic
uniformity and economic inequalities. In this way, it is disturbing that the same global
lifestyle is created when there are significant variations in quality of life, not just between
countries but also within them.
Everything should be remembered that one of the drawbacks of the globalization
process is a loss of national sovereignty; however, this model is neither negative nor
positive in and of itself; it is merely a part of the modern era.
In certain cases, if one community of states pressures another to follow economic
policies that are unpopular with the bulk of their people, it would be detrimental to their
culture. The threat of losing one's national identity is also a major concern, as cultures
gradually imitate one another in terms of popular preferences, fashions, and other factors.

7. What roles do the International Monetary Fund (IMF), the World Bank and the World
Trade Organization (WTO) play to help member States?
The IMF and the WTO collaborate on a variety of occasions in order to ensure
greater clarity in global monetary policymaking. Soon after the WTO was released, the
two organizations signed a partnership agreement that covered various aspects of their
relationship. The World Bank and the International Monetary Fund (IMF) have addressed
increasing sections, and there have been renewed demands for further development of
their commitments, especially in light of the absence of a single global money related
agreement.
In general, their role is hostile to human rights and labor rights. The growth of
anti-globalization dialogue has begun. Along, these organizations provide emerging
countries with financial auxiliary modification, privatization, and corporate sector
 liberalization. Under the aggressive international structure, developing countries have no
choice but to adhere to capitalist encouragement.

8. What is MNC? How are multinational businesses affect poorer countries? Give an
example that are not mentioned in the module.
MNC also called as the multinational corporation is a company that has
operations in both home country as well as other countries across the world. It has a
centralized office in one nation that oversees the administration of all of its other
departments, such as administrative branches and factories. Global financial integration is
all that corporations do. Investors purchase a company in the country or extend an
existing company's activities in the country. MNC is everywhere, one of these are
Microsoft Corporation, SONY Corporation, and McDonalds.

9. What are some of the issues involved with outsourcing jobs?

Most of the drawbacks of outsourcing can be reduced with careful training and
support, but nothing beats knowing what the possible risks are and how to prevent them.
Cultural discrepancies should not be overlooked when focusing on outsourcing.
Companies and their outsourced service suppliers have problems because of two kinds of
cultural discrepancies. Corporate variations, as well as global or geographical differences,
exist. A business's and its outsourcing partner's cultural differences can vary in terms of
management, authority, and design. There may be variations in ethnicity, faith, and
beliefs when it comes to national culture.
One such outsourcing issue happens as the customer expects the outsourcing
service provider to handle most everything. There may be a possibility with over input
and dissatisfaction if outsourcing standards, including those held by a company's
operations.

10. Can you imagine a world without globalization? Why?

The network would have been inaccessible if not for globalization. We'd have no
clue what is going on in other countries because it'd be a closed network. This also
implies that no inventions or discoveries can be shared. Wealthy nations would not
colonize developing nations because they would be unaware of the natural wealth
available in the latter. There will be no distinction between developed and developing
countries. There will be no need for foreign institutions such as the IMF and the World
Bank and there'd be no alliance between the nations.
We wasn't as technically advanced or as interconnected as we are today if it
weren't for globalization. Unemployment and poverty will be a local issue rather than a
global issue. It would be a country-by-country crisis, and countries would not work
together to solve it; instead, they would have to deal with it on their own.

ECONOMIC GLOBALIZATION
1. Explain economic globalization based on your own understanding?
In my own understanding, economic globalization refers to the expanding
interrelationships of world's economies of increased trade in goods and services, foreign
capital flows, and the widespread and accelerated technological innovation.

2. What is Comparative Advantage? Give situational example of this theory.

The capacity of an economy to deliver a certain product or service at a lower
opportunity cost than its trade partners is known as comparative advantage. A
competitive advantage allows a business to deliver products and services at a cheaper
cost than its rivals while maintaining higher profit margins. In an instance, if you are a
theater artist, acting is your competitive advantage. This is due to the fact that you can get
more money as an artist.

3. Does Comparative advantage Theory have disadvantages? Yes or No and why?

No. As mentioned on my answer in question number 2, comparative advantage is
the capacity of an economy to deliver a certain product or service at a lower opportunity
cost than its trade partners. A comparative advantage allows a business to offer products
or services at a cheaper cost than its suppliers while maintaining higher profit margins.
Increase in national economic growth relies on what each nation does better and
cutting costs on imports that would be more expensive to sell in domestic market. A
nation earns money by selling excess capacity goods and services to nations with diverse
competitive advantages than its own. Then, after, they will use the money gained from
manufacturing to buy products and services from countries that have a competitive edge
in producing those goods and services.

4. How did European Union’s (EUs) GSP+ profited its beneficiaries?

With due respect for human rights and sustainable development goals, the EU
assist the beneficiary countries in expanding their exports, which would result in job
establishment and thereby lead to reducing poverty. This will have beneficial side impact
on investment and non-exporting markets, as well as promote long-term sustainable
economic growth.

5. Will it be reasonable for the EUs to adopt a resolution to withdraw the Philippines’ trade
benefits under the Generalized Scheme of Preferences Plus (GSP+) if the government did
not abide by international conventions on human rights.
According to the article from Inquirer.net, which was reported by Patricia Denise
M. Chiu, The International Criminal Court (ICC) continued its inquiry into allegations
that President Rodrigo Duterte committed crimes against humanity in his bloody war on
drugs. In addition to this, threats, harassment, intimidation, rape and violence against
those exposing extrajudicial killings also occur in the country.
Yes. The Generalized Scheme of Preferences Plus (GSP+) provides trade
advantages to the country. Philippines was able to export, tariff-free, over 6,200 products
to the EU, including processed fruit, coconut oil, footwear, fish, and textiles. This trading
 privileges granted helps to boost the country’s trade with the rest of the world and
substantially reduce poverty at home. Also, the unemployment rate decreased by half due
to the GSP+.

6. How will it affect the Philippine economy once EU decided to revoke the GSP+?
Shouldn’t the government be bothered by it?
The Philippine economy will lose the European market, which will result in more
unemployment and loss of business opportunities, and it would reduce the
competitiveness of our goods and have a major effect on other sectors. Our economy will
be affected much more, following the current recession brought about by the coronavirus
disease pandemic of 2019. For the sake of our country, our government need not to take
this lightly. We assume that both sides will discuss and resolve it in a mutually agreeable
way.

7. Explain the saying that “no government in the modern world can still claim to have the
independence and sovereignty.”
I suppose that states surrender their sovereignty as a consequence of globalization,
and that this is not solely a result of multinational organizations' policies. The scope of
states' potential operations is limited by all foreign interrelationship. They may indeed
operate individually in principle, but the effects of "irresponsible" actions may be
damaging as a result of globalization.

8. Explain how traditional economic systems and forms of government contribute to poor
economic success of a country.
Traditional markets continue to run their businesses in the same manner they have
for generations. Kinds of jobs are passed on through the years. The majority of the
residents are farmers who want to use conventional techniques to cultivate the crops they
have always cultivated. There is no economic growth or development since things are
driven by tradition.

9. Explain China’s “debt trap” in the light of Dependency Theory.

The Chinese government provides loans and debts to support its aggressive BRI,
which will pave the way for potential global leadership, while on the other hand, it seizes
the riches of countries that are unable to pay their debts.
The vast BRI has become the cornerstone of China's global integration strategy.
Integrated oil, infrastructure, transportation, and connectivity linkages around the
Eurasian axis stretching to the Middle East and Africa.
Other China-friendly outlets say the contrary based on many cases taking place,
claiming that China's "debt trap" uses strategic debts to achieve political influence with
economically weak countries around the Asia-Pacific region and Africa.
 10. What is the position of the Philippines in the three-tier hierarchy? Explain how our
position in the hierarchy will determine our economic development as explained by world
systems theory.
I assume that Philippines is considered as a peripheral country. Philippines earns a
relatively limited share of global income, and have poor state institutions and depend on
– and are abused by – more industrialized countries. Due to challenges such as a shortage
of technology, an authoritarian economy, and weak education and health services, these
countries are typically economically left behind. In certain cases, using peripheral
countries' agriculture, cheap labour, and natural capital helps core countries maintain
their dominance.
In the Philippines, internationalization of trade has a negative effect on job
opportunities and employees due to several interconnected factors: trade union
constraints, regulatory authorities' failure to obey the rules, the pervasiveness of the logic
of free trade competition by those in positions of power, and, perhaps most importantly,
the lack of political will to make top-down policy and enforcement reforms to offset the
negative consequences of economic integration. Thus, Philippines experience consistent
view that economic integration does not necessarily provide increased economic growth
and prosperity for all but can instead lead to increased poverty, exploitation, and
inequality.
MARKET INTEGRATION
1. What is market integration?
An idea in which two or more companies will trade with one another is referred to
as market integration. When there is strong integration, it ensures that trade costs are low
and costs are comparable between the two countries. Where there is an
interconnectedness, trade barriers are high, and costs fluctuate within these economies.
Multinational trading contributes to global development by lowering trade barriers and
increasing market fluidity. When international exchange grows, the price can fall before
it hits the price of the original market where the agreement was made.

2. What marks the start of market integration? Explain.

Significant progress in global market integration and the development of a fully
global economy occurred during the nineteenth century. In this case, technological
advancement was crucial. From the 1830s until around, the railroad carriage and the
naval steam engine pioneered global transportation. Steamships linked the world's coasts,
and railroads operated inland from the ports, providing a modern and quicker global
transportation system. Transport prices dropped significantly allowing items to be
transported across the world to ever-further markets while remaining cheaper than the
same item manufactured locally.
 This leads to a significant reduction of foreign trade barriers, a faster rate of
global output growth, the expansion of advanced industrialization-related living standards
to new areas of the world, and a reduction in poverty and leaping living conditions in
most other parts of the world, as well as the rise of a host of major core players in the
global economy.

3. Explain in your own words how free trade stimulate market integration?
Free trade deals could lower tariffs and trade rates, resulting in a quicker
integration of domestic and international prices. However, internal adjustments in
logistics and transaction rates were not the only factors that encouraged market
integration. Export tariffs on imported commodities became common practice, as nations
sought to increase the amount of gold in their international trade reserves by exporting
more to each of their business partners than they obtained from them. Apart from a few
luxury products, the nation was forced to abandon duties on all manufactured
commodities, resulting in free trade. With free trade, economic ties with a foreign nation
no longer had to balance or be in surplus. Alternatively, a current account deficit with one
region could be replaced by an export growth to another, modernizing international trade
in an unconventional way.

4. Differentiate open-market from protectionism. Explain how these two economic systems
in a way help domestic producer?
By encouraging buyers to purchase more higher-quality goods at cheaper prices,
the open-market raises opportunity for people of all involved countries. It promotes
economic growth, improved productivity, increased creativity, and the increased justice
that a rules-based structure brings. When total exchange, exports and imports grows, so
do these advantages. It has an open and transparent commercial transactions between
nations, unconstrained by trade restrictions, or wherever supplies can flow freely through
regions with no limitations.
However, most countries returned to protectionism as a trade mechanism to
ensure the safety of domestic manufacturers from inequitable global competition. It was
created to prevent farmers from unreasonable agricultural import prices as a defense
strategy inspired by political considerations. This mechanism operates in the short term.
However, in the long run, it is extremely harmful. It reduces the country's and its
companies' foreign competitiveness.

5. Make a timeline showing the integration of grain markets at the turn of the century.
Grain market is about as ancient as grain cultivation, dating back centuries ago.
Since transporting large volumes of grain was difficult with ancient technologies, early
trading was most likely based on barter. As a result, the volume traded and the distance
grain was shipped is likely very small. Grain kept flowing daily from the outskirts of
great civilizations of the ancient world: corn in ancient Mexico, rice in ancient China, and
wheat and barley in the ancient Near East. The Hebrew Bible also mentions ancient
 Egypt's large grain silos as a result of this advancement in grain storage and
transportation technology.
During the classical period, the Roman Empire's integration of China and
mobilization of the Mediterranean basin produced large regional commodity markets on
both ends of Eurasia. Roman generals and leaders found the grain supply to the city of
Rome to be of critical strategic significance. Farmers in Australia and Canada revolted
against the pricing influence of major grain-handling and transportation firms in the
1920s and 1930s. Their governments established the Australian Wheat Board and the
Canadian Wheat Board as monopsony marketing boards, respectively, to purchase all of
the wheat produced in those countries for export. In the mid-twentieth century, those two
boards regulated a considerable portion of the global grain trade. Farmers' cooperatives,
such as wheat pools, have also been a common alternative to the big grain firms.

6. Give 1 advantage and also 1 disadvantage for each market integration.

Horizontal integration will be very helpful to all firms. This usually occurs as two
firms of the same sector at the same point of development plan to merge. However,
before considering it, companies should weigh the benefits and drawbacks of the strategy,
as well as how merging into another company will affect their bottom line. Increased
market share or market control is the most significant advantage. When two businesses
merge, they also integrate their product lines, technologies, and services. This is one of
the disadvantages to remember in addition to the advantages. Since the interconnections
never manifest amid the costs of horizontal integration, wealth is being destroyed rather
than created.
There are greater accomplishments that can be integrated into the infrastructure as
one company can manage all facets of their corporate processes without including third
parties. Vertical integration has the downside of limiting the amount of differentiation a
company can access.
By purchasing businesses whose shares are more depreciated than most others, a
conglomerate will demonstrate gross margins. The risk of losing money is reduced by
diversification. If one corporate sector performs badly, deficits may be made up by other,
effectively market segments. A conglomerate merger's disadvantages include labor
shortage, cultural clashes, and a turn away from core companies. Big corporations
consolidating the industry by purchasing smaller businesses, according to opponents of
conglomerate mergers, will lead to a lack of business performance.

7. Explain how sellers on each market benefit from integration?

Consumers and sellers will get goods and services at a cheaper price than before.
Cross-border integration can favor governments by facilitating free exchange of goods
and services and guaranteeing that customers in one country can efficiently purchase and
sell commodities with another.

8. Can consumers benefit from the integration of two markets in terms of lower price,
quality products and sufficient supplies? Explain each.
 In distinct product environments, consumers often profit from increased
competition. Customer demands are increasing, and in order to stay competitive, you
must meet them. They attempt to find the best combination of prices and services at their
retailer of choice. Right now, the market has sufficient supply of products because of
market integration that allows consumers to select in a variety of products in a wide range
of prices. As more competitors arise, conventional supermarkets typically decrease their
prices or do not increase them as much because of the increased competition. Thus,
consumers demonstrate with their expenditure choices that they prefer lower priced
outlets, and the higher priced supermarket must respond in a competitive manner.

9. Explain Forward and Backward market integration. Give a concrete example.

Forward integration is a corporate practice that entails a type of indirect
integration in which a firm owns and operates business operations that are forward of the
market's production chain, such as direct sales or delivery of the particular good. Vertical
incorporation is carried out by a corporation as it moves up the supply chain. A great
illustration of forward integration is a civil engineer who puts up his own firm for direct
consultation rather than to work in a well-established firm where his clients are limited
only.
Backward integration is the mechanism by which a firm buys or merges with
other companies that sell the raw materials it needs to make the final goods. Businesses
seek backward integration in the hopes of reducing costs, increasing sales, and improving
manufacturing productivity. An example that can be considered as backward integration
is a foreman that purchases a chainsaw and cement mixer. In this situation, a product
distributor buys one of its own suppliers, leaving out the middleman and constraining
competitors.

10. Explain ‘diversification’ which is the main motive of Conglomerate Company.

Since some conglomerates, such as those in mines, want to compete in a single
sector, they also diversify their business risk by investing in a variety of markets.
Economists, on the other hand, warn that vast and divided up conglomerates will become
inefficient and expensive to manage, eroding shareholder value. A conglomerate
company's participation in a variety of markets will help it diversify the risks associated
with being in a single industry. This can also assist the parent in reducing overall running
expenses and requiring less staff. However, there are times where an organization
becomes too big and sacrifices its productivity.