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GROUP ONE


 
 

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i Global linkages, innovation and
productivity growth:
i Economic effects of international
outsourcing:
i Financial development and the growth of
R&D intensive industries:
i Economic effects of exchange rate
changes:
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i Úountries have become more ×


through increased international trade, foreign
investment, migration, and more efficient
transportation and telecommunication.
i 6he foreign exchange market is the largest market
in the world.
i Industries GG × in the face of global
competition.
i International agreements such as the World 6rade
Organization (W6O), North American Free 6rade
Area (NAF6A), and European Union (EU) are
becoming a fundamental form of government.
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i Government policy protects some
favored industries from the pressures of
international competition and subsidizes
others for export, at the expense of
everyone in the economy.
i 6ax policies are designed to hinder trade
and investment.
i Government central banks interfere with
the foreign exchange market.
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i 6he 1973 oil crisis began in earnest on October 17,
1973, when Arab members of the Organization of
Petroleum Exporting Úountries (OPEÚ), during the
Yom Kippur War, announced that they would no longer
ship petroleum to nations that had supported Israel in
its conflict with Syria and Egypt -- that is, to the United
States and its allies in Western Europe. 6he Arab-
Israeli conflict triggered an energy crisis in the making.

i 6he effects of the embargo were immediate. OPEÚ

forced the oil companies to increase payments
drastically. 6he price of oil quadrupled by 1974 to
nearly US$12 per 42 US gallon barrel (75 US$/m³).


i 6his increase in the price of oil had a dramatic
effect on oil exporting nations, for the countries
of the Middle East who had long been
dominated by the industrial powers.

i 6he traditional flow of capital reversed as the oil

exporting nations accumulated vast wealth.

i But for nations whose economies had been

caught between higher prices of oil and lower
prices for their own export commodities and raw
materials are the most sufferer.

Sources: OPEÚ Nations Report 1974

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i 6he global financial crisis, brewing for a while, really
started to show its effects in the middle of 2007 and
into 2008. Around the world stock markets have
fallen, large financial institutions have collapsed or
been bought out, and governments in even the
wealthiest nations have had to come up with rescue
packages to bail out their financial systems.

i On the one hand many people are concerned that

those responsible for the financial problems are the
ones being bailed out, while on the other hand, a
global financial meltdown will affect the livelihoods of
almost everyone in an increasingly inter-connected
world.


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i A collapse of the US sub-prime
mortgage market and the reversal of the
housing boom in other industrialized
economies have had a ripple effect
around the world.
i 22% of world population is dumped in
poverty. (Including 34% in developing
and 54% in underdeveloped nations.)
Sources: US FY Budget 2010-11
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i Great Depression (1929) made 33% of world
population unemployed, 70% of world
population below poverty line, 67% loss of
world economy. Source: BBÚ, 30 April 1933

i Soccer World Úup In South Africa boosted the

African Úontinent economy by 8.4% and South
African economy by 18%.
Source: FIFA Report

i ÚWG is expected to boost Indian economy by

3% and that of South Asian Economy by 1.2%.
Source: FY Report Union Government