LESSON 5: MARKET

INTEGRATION PART II
PRODUCTION SECTORS
•Primary
•Secondary
•Tertiary
 INTERNATIONAL FINANCIAL
INSTITUTIONS AND ECONOMIC
ORGANIZATIONS
 1. BRETTON WOODS SYSTEM
• expression of currency in terms of gold or gold value
• official monetary authority in each country (e.g. central bank)
• overseer for exchange rates (International Monetary Fund)
• eliminating restrictions on the currencies of member states in the
international trade
• US dollar as the global currency
2. The General Agreement on Tariffs and Trade
(GATT) and the World Trade Organization
(WTO)

• GATT (1947; meeting of 23 countries; trade good through

international trade agreements conducted in many rounds of
negotiation)
• WTO (headquarters at Geneva, Switzerland; independent
organization responsible for trade in services, non-tariffs
barriers to trade and trade liberalization)
3. International Monetary Fund (IMF)
and the World Bank

• Peace Advocacy after WWII

• Economic stability of the world
• Financial assistance to different countries
 4. The Organization for Economic Cooperation and
Development (OECD), the Organization of Petroleum
Exporting Countries (OPEC), and the European Union
(EU)
• OECD (club of the richest countries in the world particularly 35 member states;
influential in terms of resources and economic power but little power)
• OPEC (1960 because of the increase price of oil; Saudi Arabia, Iraq, Kuwait, Iran
and Venezuela; United Arab Emirates, Algeria, Libya, Qatar, Nigeria, and
Indonesia)
• EU (28 member state; euro as basic currency of the Eurozone)
 5. North American Free Trade
Agreement (NAFTA)
• Trade pact between US, Mexico and Canada on
January 1, 1994
• 1989 Canada and US only
• Develop and expand world trade by broadening
international cooperation
• Improve working conditions in North America by
removing trade barriers
 HISTORY OF GLOBAL
MARKET INTEGARTION
How do people produce
for their needs?
(Past vs. Present)
 1. Agricultural Revolution and
Industrial Revolution
• Agricultural Revolution (domestication of plants
and animals; farming)
• Industrial Revolution (rise of steam engines,
manufacturing, and mass production; wage
laborers)
 2. Capitalism and Socialism

•Capitalism (natural resources and means of

production are privately owned; profit maximization
and competition; improve quality and decrease
prices: invisible hand by Adam Smith in 1770s)
•Socialism (means of production under collective
ownership; owned by the government and allocated
to all citizens; stepping stone to communism, a
political and social economic system in which all
 3. The Information Revolution

• Technology reduced human labor

• Decline in union membership except in teaching
• Decline in agricultural and manufacturing jobs
(primary and secondary sectors)
• Emphasis on service industry (administrative
assistants, lawyers, doctors, etc.)
TYPES OF JOBS ACCORDING TO SOCIAL
STATUS AND COMPENSATION

•Primary labor Market (white collar

professions)
•Secondary Labor Market (low-level
service sector jobs and low skilled jobs)
 CORPORATIONS

•Organizations that exist as legal entities

and have liabilities that are separate
from its members
 GLOBAL CORPORATIONS
• NO SINGLE COUNTRY IS COMPLETELY INDEPENDENT
• Increase international trade
• Also known as multinational or transnational
corporations (MNCs or TNCs extend beyond the borders
of one country)
• e.g. McDonald’s, Coca-Cola (America); General Electric
(US), Ford Motor (Michigan)
 DIFFUSION
•Cultural practices and expressions are
passed between nations, spreading from
group to group
 TASK 5.1
Answer the following questions:
1. What are the effects of the information revolution in today’s
global market?
2. Analyze the global nature of multinational corporations. What
are the effects of multinational corporations in the Philippine
economy?
3. Analyze socialism and capitalism in relation with the Philippine
society. Which of these economic systems would work in our
country? Justify your answer.
 TASK 5.1
• A student will collect all the documents and submit them on or
before March 20, 2020 at aikacarlad@gmail.com (File name: BTLEd
IA).
• Format:
• Font Style: Arial
• Font Size: 12
• Line Spacing: Single
• Margin: Normal
• Orientation: Portrait