Reviewer Contemporary World

Market Economy - A market economy is a system where the laws of supply and
demand direct the production of goods and services. Supply includes natural resources, capital,
and labor. Demand includes purchases by consumers, businesses, and the government.

4 Freedoms: Freedom of products and services, Freedom of

Information and Technology, Freedom of Banks and Capital
Financing and Freedom of Migrations
Global Interconnected - Global Interconnectedness refers to the ability to understand
and function in an increasingly multicultural, international, yet interconnected environment.

Deterritorialization - The eradication of social, political,
or cultural practices from their native places and populations

Financial institutions like banks, insurance and financial

markets like stocks and bonds
Shares, often called stocks or shares of stock, represent the equity ownership of a
corporation divided up into units, so that multiple people can own a percentage of a business. 

Common Stock
Common stock is, well, common. When people talk about stocks in
general they are most likely referring to this type. In fact, the majority
of stock issued is in this form. We basically went over features of
common stock in the last section. Common shares represent
ownership in a company and a claim (dividends) on a portion of profits.
Investors get one vote per share to elect the board members, who
oversee the major decisions made by management.

Over the long term, common stock, by means of capital growth, yields
higher returns than almost every other investment. This higher return
comes at a cost since common stocks entail the most risk. If a
company goes bankrupt and liquidates, the common shareholders will
not receive money until the creditors, bondholders, and preferred
shareholders are paid.
Preferred Stock
Preferred stock represents some degree of ownership in a company
but usually doesn't come with the same voting rights. (This may vary
depending on the company.) With preferred shares investors are
usually guaranteed a fixed dividend forever. This is different than
common stock, which has variable dividends that are never
guaranteed. Another advantage is that in the event of liquidation
preferred shareholders are paid off before the common shareholder
(but still after debt holders). Preferred stock may also be callable,
meaning that the company has the option to purchase the shares from
shareholders at anytime for any reason (usually for a premium).

Some people consider preferred stock to be more like debt than

equity. A good way to think of these kinds of shares is to see them as
being in between bonds and common shares. (If you don't understand
bonds make sure also to check out our bond tutorial.)

Subsidy - a sum of money granted by the government or a public body to assist an

industry or business so that the price of a commodity or service may remain low or competitive.
A tariff is a tax on imports or exports between sovereign states. It is a form of regulation of foreign
trade and a policy that taxes foreign products to encourage or safeguard domestic industry

An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that
can be imported into a country in a given period of time. Quotas, like other trade restrictions, are
typically used to benefit the producers of a good in that economy.

media globalization is the worldwide integration of media through the cross-

cultural exchange of ideas, while technological globalization refers to the cross-cultural
development and exchange of technology.

Economic liberalism, also referred to as liberal capitalism, is

an economic system organized on individual lines, meaning that the greatest possible number
of economic decisions are made by individuals or households rather than by collective
institutions or organizations.

The foreign exchange market (Forex, FX, or currency market) is a global

decentralized or over-the-counter (OTC) market for the trading of currencies.
This market determines foreign exchange rates for every currency. It includes all aspects of
buying, selling and exchanging currencies at current or determined prices.

Protectionism is the economic policy of restricting imports from other countries

through methods such as tariffs on imported goods, import quotas, and a variety of other
government regulations
A centrally planned economy is an economy where
decisions on what to produce, how to produce and for whom are taken by the government in
a centrally managed bureaucracy. Central planning is also referred to as a 'Command economy'
or 'Communist economy. '

National Socialism  more commonly known as Nazism is the ideology

and practices associated with the Nazi Party—officially the National Socialist German Workers'
Party (Nationalsozialistische Deutsche Arbeiterpartei or NSDAP)
National Socialism (Nazism) is a totalitarian system originally created in Germany immediately
following World War I, and characterized by a collectivist view toward race. (EQUALITY AND
BROTHERHOOD ONLY AMONG THE SUPER RACE IN DETERMINING WHAT TO PRODUCE,
HOW TO PRODUCE, HOW MUCH TO PRODUCE, FOR WHOM TO PRODUCE OR WHO IS TO
RECEIVE IT AND HOW THE SYSTEM SHOULD FLEXIBLE TO CHANGE? IN THE ALLOCATION
OF SCARCE RESOURCES TO SATISFY NEEDS AND WANTS

Popular culture is generally recognized by members of a society as a set of

the practices, beliefs, and objects that are dominant or prevalent in a society at a given point in time.
Popular culture also encompasses the activities and feelings produced as a result of interaction with
these dominant objects.

Popular culture - cultural activities or commercial products reflecting, suited to, or aimed at the
tastes of the general masses of people.

A variable import levy is a levy on imports that raises

their price to a level at least as high as the domestic price.

Export Levy. A tax that a country imposes on its exports, which makes them
more expensive. Export levies may encourage domestic consumption of domestically
produced goods.
A foreign direct investment (FDI) is an investment made by a
firm or individual in one country into business interests located in another country. ... However,
FDIs are distinguished from portfolio investments in which an investor merely purchases
equities of foreign-based companies
NOTE: THE OTHER WORD FOR SHARE OF STOCKS IS EQUITIES

A portfolio investment is ownership of a stock, bond, or other

financial asset with the expectation that it will earn a return or grow in value over
time, or both. It entails passive or hands-off ownership of assets as opposed to
direct investment, which would involve an active management role.
INVESTMENT PORTFOLIO
market fluctuation (VOLATILITY) according to Defined Term is “the rise or
fall in a security's price or portfolio's value within a short-term period
Mercantilism is a national economic policy that is designed to maximize the exports, and minimize
the imports, of a nation. These policies aim to reduce a possible current account deficit or reach a
current account surplus (TRADE SUPLUS = EXPORT> IMPORT = PROFIT IN DOLLAR
RESERVES AND OTHER FOREIGN CURRENCIES (IN OLD MERCANTILISM- GOLD
RESERVES)

What Is Mercantilism?
Mercantilism was an economic system of trade that spanned from
the 16th century to the 18th century. Mercantilism is based on the principle that
the world's wealth was static, and consequently, many European nations
attempted to accumulate the largest possible share of that wealth by
maximizing their exports and by limiting their imports via tariffs.

Bullionism is an economic theory that defines wealth by the amount of precious

metals owned.

ethnicity - an ethnic group; a social group that shares a common and distinctive
culture, religion, language

A dummy corporation , dummy company, or false company is an entity

created to serve as a front or cover for one or more companies. It can have the appearance of
being real (logo, website, and sometimes employing actual staff), but lacks the capacity to
function independently
Cultural globalization refers to the transmission of ideas, meanings, and values around the world in
such a way as to extend and intensify social relations. This process is marked by the common
consumption of cultures that have been diffused by the Internet, popular culture media, and
international travel

Technological globalization is speeded in large part

by technological diffusion, the spread of technology across borders. ... While the diffusion of
information technologies has the potential to resolve many global social problems, it is often
the population most in need that is most affected by the digital divide.

Globalization of Migrations - The borderless Schengen

system, one of the European Union’s flagship policies, is a zone in which passport controls have
been abolished for travellers but which has been undermined in recent years by numerous
exceptions amid concerns over migration and terrorism.

Globalization has made migration much easier through

better communications, dissemination of information through mass media and improved
transport, among others. It is the increasing trade and investment flows in many regions, which
facilitated interest and awareness in migration
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

The increasing integration of global capital markets now makes it easier for
firms to access capital outside of their home countries. Firms access international capital markets
through a variety of means such as initial public offerings (IPO), seasoned equity offerings (SEO),
cross-listings, depository receipts, special purpose acquisition companies (SPACS), shelf
offerings, private equity and other informal equity capital channels.   Firms can also access debt
resources outside their market through bank loans, and foreign bond issues.

The globalization of financial  intermediation is partly a response to the

demand for mechanisms to intermediate cross-border flows and partly a response to declining
barriers to trade in financial services and liberalized rules governing the entry of
foreign financial institutions into domestic capital markets.

Global communication  is directly affected by the process of globalization, and

helps to increase business opportunities, remove cultural barriers and develop a global village.
Both globalization and global communication have changed the environmental, cultural,
political and economic elements of the world.

Cultural globalization refers to the transmission of ideas,

meanings, and values around the world in such a way as to extend and intensify social
relations. ... Cultural globalization involves the formation of shared norms and knowledge with
which people associate their individual and collective cultural identities.

Ethnocide concerns policies and processes designed to destroy the separate

identity of a group, with or without the physical destruction of its members

Globalization of Language (English Language and Ethnocide )

Globalization and English language are said to work as pull factors for one another. English
language plays a major role in the progress of Globalization. Globalization of
trade and commerce, increasing diversities of work force with different setup values have increased
the importance of English language usage

Globalization of Mandarin - This study argues that although the

English language is still the major global language, the Mandarin Chinese language is
challenging it and hoping to replace it in the future. The Chinese government is committed to
promoting and spreading of the Mandarin Chinese language around the world.

McDonaldization is a McWord developed by sociologist George Ritzer in his 1993

book The McDonaldization of Society. For Ritzer, "McDonaldization"
is when a society adopts the characteristics of a fast-food restaurant

(CHINASATION) Sinicization is defined as bringing people who are not of

Chinese descent under the influence of Chinese culture. It is a process where societies that are
traditionally non-Chinese are put under the influence of the Han Chinese communities, by
adapting to their culture, customs, and way of life.

CHINA Debt-trap diplomacy refers to the strategy used by China to lure

or trap developing or underdeveloped countries like in Africa to borrow money to be used for much
needed infrastructure projects.
Tribalism is the state of being organized by, or advocating for, tribes or tribal lifestyles.
Human evolution has primarily occurred in small groups, as opposed to mass societies, and humans
naturally maintain a social network.

Imperialism is a policy or ideology of extending a country's rule over foreign nations, often by military
force or by gaining political and economic control of other areas. 

GLOBALIZATION OF FOREIGN DIRECT

INVESTMENTS - Globalization Increases International
Investing
Companies benefit from pricing differences, or arbitrage, in different markets for labor
and supplies. Globalization compels connected economies to continue to invest in
each other to protect their economic health and acquire new profits. J
A joint venture is a business entity created by two or more parties, generally characterized by shared
ownership, shared returns and risks, and shared governance.

Militarism is the belief or the desire of a government or a people that a state should maintain a
strong military capability and to use it aggressively to expand national interests and/or values.

CLASH OF CIVILIZATION (BALKANIZATION) - The Clash of

Civilizations is a thesis that people's cultural and religious identities will be the primary source of
conflict in the post-Cold War world. The American political scientist Samuel P. Huntington argued
that future wars would be fought not between countries, but between cultures. (THE REMAKING OF
THE WORLD FROM THE COLD ERA OF PRO USA MARKET ECONOMY WESTERN EUROPE
COLONIALISTS AND AGAINST THE PRO SOVIET RUSSIAN COMMUNIST BLOC INTO
NUCLEAR ARMS RACE AND OTHER WEAPONS OF MASS DESTRUCTIONS)

The Cold War rivalry between the United States and the Soviet Union lasted for decades
and resulted in anti-communist suspicions and international incidents that led the two superpowers
to the brink of nuclear disaster.

The Berlin Wall was a guarded concrete barrier that physically and ideologically divided
Berlin from 1961 to 1989. Construction of the Wall was commenced by the German Democratic
Republic on 13 August 1961. The Wall cut off West Berlin from surrounding East Germany, including
East Berlin. 

the Cold War ended when the world's first treaty on

nuclear disarmament was signed in 1987, the end of the
Soviet Union as a superpower amid the Revolutions of
1989 or when the Soviet Union dissolved
in 1991.
THE SOVIET UNION

EASTERN EUROPE COMMUNIST BLOC

WARSAW MILITARY PACT COUNTRIES ARE COMMUNIST
WHILE NATO COUNTRIES ARE PRO USA MARKET LIBERAL
ECONOMY
The Iron Curtain specifically refers to the imaginary line dividing Europe
between Soviet influence and Western influence, and symbolizes efforts by the Soviet Union to
block itself and its satellite states from open contact with the West and non-Soviet-controlled
areas. (THE BERLIN WALL)
Globalization compels connected economies to
continue to invest in each other to protect their economic health and acquire
new profits. ... The competitive nature of globalization, in other words, ultimately has a social
and economic impact that transforms economies in pursuit of investment and greater economic
activity.

Globalisation of the banking sector is essential in that it brings new

technology which help improve banking services and infrastructure hence reduce fraudulent
activities, new risk management techniques and increased confidence in the banking sector.

What Is Financial Liquidity?

Financial liquidity refers to how easily assets can be converted into cash. Assets
like stocks and bonds are very liquid since they can be converted to cash within
days. However, large assets such as property, plant, and equipment are not as
easily converted to cash. For example, your checking account is liquid, but if you
owned land and needed to sell it, it may take weeks or months to liquidate it,
making it less liquid.

Understanding Financial Liquidity
Cash is the most liquid asset. However, some investments are easily converted
to cash like stocks and bonds. Since stocks and bonds are extremely easy to
convert to cash, they're often referred to as liquid assets. 
Liquidity in the Market
Market liquidity refers to a market's ability to allow assets to be bought and sold
easily and quickly, such as a country's financial markets or real estate market. 

The market for a stock is liquid if its shares can be quickly bought and sold and
the trade has little impact on the stock's price. Company stocks traded on the
major exchanges are typically considered liquid.
NATIONALIZED INDUSTRIES
Nationalization. Nationalization refers to when a government takes control of a company
or industry, which generally occurs without compensation for the loss of the net worth of seized
assets and potential income.
A monopoly exists when a specific person or enterprise is the only supplier of a particular
commodity. This contrasts with a monopsony which relates to a single entity's control of a market to
purchase a good or service, and with oligopoly which consists of a few sellers dominating a market.

A cartel is a group of an independent market participants who collude with each other in order to
improve their profits and dominate the market. Cartels are usually associations in the same sphere
of business, and thus an alliance of rivals. Most jurisdictions consider it anti-competitive behavior.

Collusion is a non-competitive, secret, and sometimes illegal agreement between rivals which
attempts to disrupt the market's equilibrium. The act of collusion involves people or companies
which would typically compete against one another, but who conspire to work together to gain an
unfair market advantage.

The Silk Road was a network of trade routes which connected the East and West, and was central to
the economic, cultural, political, and religious interactions between these regions from the 2nd
century BCE to the 18th century.

Outsourcing is an agreement in which one company hires another company to be responsible for a
planned or existing activity that is or could be done internally, and sometimes involves transferring
employees and assets from one firm to another.

outsourcing refers to an organization contracting work out to a 3rd

party, while offshoring refers to getting work done in a different country,
usually to leverage cost advantages. It's possible to outsource work but not
offshore it; for example, hiring an outside law firm to review contracts
instead of maintaining an in-house staff of lawyers. It is also possible to
offshore work but not outsource it; for example, a Dell customer service
center in India to serve American clients. Offshore outsourcing is the
practice of hiring a vendor to do the work offshore, usually to lower costs
and take advantage of the vendor's expertise, economies of scale, and
large and scalable labor pool.

Offshoring

With Offshoring, the operating activities are relocated to

another country, and the geographical location is
irrelevant. Offshoring can be divided into two subdivisions,
namely Nearshoring (neighbouring countries with or without a
shared border) and Farshoring (distant countries e.g. countries
in East Asia).
Offshoring is often employed to reduce the personnel costs of
a company. However, its success is subject to several
requirements – one of which regards communication. Strong
internet connections are also particularly important for all
peripheral devices to allow for effective communication. If IT
companies are linguistically and technically focused on highly
qualified employees abroad, they usually choose Nearshoring
as an alternative due to same spoken language, for example.
Nearshoring

Nearshoring is the outsourcing of business processes,

especially information technology processes, to companies in
a nearby country, often sharing a border with the target
country. Therefore, it is the opposite of Farshoring and can be
seen as a special form of Offshoring.
For a company based in Germany, typical Nearshoring
locations include the following:
 Poland

 the Czech Republic

 and Serbia.
Nearshoring offers optimal solutions for companies that
want to outsource processes in order to maximize business
efficiency but reduce the barriers of traditional offshoring.
Compared to offshoring, the benefits are, for example, no or
little time shift as well as cultural differences, easy
communication due to good language skills and fast but also
cost-effective travel.

Onshoring is the exact opposite of Offshoring, it refers to

the relocation of business processes to a lower-cost
location inside the national borders. Functions and processes
are often located to a nearby location, this is often the case
with big clients, as close proximity may be a condition of the
working agreement. A typical example could be suppliers of
the automotive industry. Working in close proximity (often
directly next to the factory premises of their customers)
allows a business to provide the quickest possible service,
one that is tailored to suit their market needs and therefore
supply customers based on the just-in-time principle.
Onshoring improves the cost structure considerably and
allows great flexibility within organisations. Furthermore, the
coordination and communication of production is more
effective and efficient.

ECONOMIES OF SCALE AND DISECONOMIES

OF SCALE
In microeconomics, economies of scale are the cost advantages that enterprises obtain due to their

scale of operation, with cost per unit of output decreasing with increasing scale

FACTORS OF ECONOMIES OF SCALE:

1. TECHNOLOGY

2. HUMAN RESOURCES AND EDUCATION

3. GOVERNMENT SUPPORT AND REGULATIONS

AND PUBLIC POLICY
A portfolio is a grouping of financial  assets such as stocks, bonds,
commodities, currencies and cash equivalents, as well as their fund counterparts, including
mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly tradable
securities, like real estate, art, and private investments

International trade is the exchange of capital, goods, and services across international borders or
territories. In most countries, such trade represents a significant share of gross domestic product.
Trade globalization is a type of
economic globalization and a measure (economic indicator) of economic
integration. On a national scale, it loosely represents the proportion of all production that
crosses the boundaries of a country, as well as the number of jobs in that country dependent
upon external trade.

The foreign exchange market is a global decentralized or over-the-counter market for the trading of
currencies. This market determines foreign exchange rates for every currency. It includes all aspects
of buying, selling and exchanging currencies at current or determined prices

A trade deficit is an amount by which the cost of a

country's imports exceeds the cost of its exports. It's one way of
measuring international trade, and it's also called a negative balance of trade.
You can calculate a trade deficit by subtracting the total value of a country's
exports from the total value of its imports

Causes
A trade deficit occurs when a country does not produce everything it needs and
borrows from foreign states to pay for the imports. That's called the current
account deficit.2
A trade deficit also occurs when companies manufacture in other countries. Raw
materials for manufacturing that are shipped overseas to factories count as
exports. The finished manufactured goods are counted as imports when they're
shipped back to the country. The imports are subtracted from the country's gross
domestic product even though the earnings may benefit the company's stock
price, and the taxes may increase the country's revenue stream
A shipping container is a container  with strength suitable to withstand
shipment, storage, and handling. Shipping containers range from large reusable steel boxes used for
intermodal shipments to the ubiquitous corrugated boxes. In the context of international shipping
trade, "container" or "shipping container" is virtually synonymous with "intermodal freight container,"
a container
designed
to be moved
from one mode
of transport
to another
without unloading
and reloading.

Intermediate bulk containers (also known as: IBC

tote, IBC tank, IBC or pallet tanks), are reusable, multi-use industrial-grade containers engineered
for the mass handling, transport and storage of liquids, semi-solids, pastes, or solids. [1] The two main
categories of IBC tanks are flexible IBCs and rigid IBCs
Laissez faire is the belief that economies and businesses function best
when there is no interference by the government. It comes from the French, meaning to leave
alone or to allow to do. It is one of the guiding principles of capitalism and a free
market economy
Globalization and Income Inequality

EU COMMON MARKET AND COMMON CURRENCY

What Is Brexit?
Brexit is an abbreviation for "British exit," referring to the U.K.'s decision in a June
23, 2016 referendum to leave the European Union (EU).1 The vote's result defied
expectations and roiled global markets, causing the British pound to fall to its
lowest level against the dollar in 30 years. Former Prime Minister David
Cameron, who called the referendum and campaigned for the U.K. to remain in
the EU, announced his resignation the following day. Theresa May, who replaced
Cameron as leader of the Conservative Party and prime minister, stepped down
as party leader voluntarily on June 7, 2019 after facing severe pressure to resign
and failing three times to get the deal she negotiated with the EU approved by
the House of Commons.2 The following month, Boris Johnson, a former Mayor of
London, foreign minister, and editor of The Spectator newspaper, was elected
prime minister.

MARKET EQUILIBRIUM (EQUILIBRIUM PRICE) = AT CERTAIN

PRICE THE DEMAND EQUALS SUPPLY= NO SURPLUS AND
NO SHORTAGE