Globalization

Is a process of interaction and integration among the people, companies, and governments of different
nations, a process driven by international trade and investment and aided by information technology. This
process has effects on the environment, on culture, on political systems, on economic development and
prosperity, and on human physical well-being in societies around the world.
Advantages
- Helps boost the average growth rate of the country’s economy through improving in allocative efficacy and --
efficiency of the resources
- It increases labor productivity and reduces capital-output ratio
- It makes way for eliminating in-efficiency in the production system.
- In its absence, makes the production system careless about cost-effectiveness
- Attracts foreign capital as well as foreign updated technology, improving the quality of production.
Disadvantages
- Leads the way to redistribute the economic power at global level which leads to dominance of rich-powerful
countries over poor nations
- Results in more imports than exports resulting in growing trade deficit and balance of payment issue
- Even though Globalization promotes technological adaption to increase productivity, much of it has resulted
in loss of jobs.
- Small scale industries cannot withstand competition due to MNCs bought by globalization.

World Trade Organization (WTO)

is the only global international organization dealing with the rules of trade between nations.
At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s
trading nations and ratified in their parliaments. The goal is to help producers of goods and
services, exporters, and importers conduct their business.

Global economy

is the exchange of goods and services integrated into a huge single global market. It
is virtually a world without borders, inhabited by marketing individuals and/or
companies who have joined the geographical world with the intent of conducting
research and development and making sales.

International trade permits countries to specialize in the resources they have.

Countries benefit by producing goods and services they can provide most cheaply and
by buying the goods and services other countries can provide most cheaply.
International trade makes it possible for more goods to be produced and for more
human wants to be satisfied than if every country tries by itself to produce everything
it needs.