R.A.

11469: Pure
Capitalism and
Market Integration
ECONOMY

▰ composed of people; it is also the sole social institution

that handles all production, consumption, and the trade of
goods in our society.

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TOP THREE
SECTORS OF
PRODUCTION 3
Primary Sector

▰ extracts/harvests raw materials from our

environment.

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Secondary Sector

▰ focuses on manufacturing finished goods.

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Tertiary Sector

▰ the service industry

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“ The IATF considered the
three sectors in lifting the
community quarantine.

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R.A. 11469:
Bayanihan to Heal as
One Act
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- a law in the Philippines that was enacted in March 2020 granting
the President additional authority to combat the COVID-19
pandemic in the Philippines

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MARKET INTEGRATION

▰ occurs when prices among different location or related

goods follow similar pattern over a long period of time.

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History of Global
Market Integration
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Agricultural Revolution is the first big economic change that shaped
history.

The second major economic revolution happened during the

Industrial Revolution period.

In the late nineteenth (19th) century, labor union began to form

organizations to improve wages and working conditions.

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Two Competing
Economic Models
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Capitalism

▰ a system in which all-natural resources and means of

production are privately owned.

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Socialism

▰ production are under collective ownership.

▰ property is owned by the government and allocated to all
citizens, not only those with money to afford it.

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Bretton Woods System
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was established after World War I, the Great Depression in 1930s,
and World War II.

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Five Key Elements of the Bretton Woods System

Expression of Currency
the expression of currency for gold or gold value to establish a par value-
this means that to create unified value equivalent, gold was used as an
example.

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Five Key Elements of the Bretton Woods System

Agreement of Monetary Authorities

the official monetary authority in each country- a central bank or its
equivalent would agree to exchange its own currency for those of other
countries at the established exchange rate, plus or minus a one percent
margin.

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Five Key Elements of the Bretton Woods System

Establishment of the International Monetary

Fund
the establishment of an Overseer for the exchange rate. IMF was created
to monitor the exchange rate of every country and would make sure
everything is just and proper, preventing over the top rates for monetary
exchanges.

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Five Key Elements of the Bretton Woods System

Eliminating Restrictions
restrictions has been eliminated for states that are a member of the IMF
in the international trade.

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Five Key Elements of the Bretton Woods System

US dollar as the global currency

United States dollar has been the global basis for currency.

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General Agreement on Tariffs and Trades (GATT)
- was one of the systems that were born out of the Bretton Woods, established in
1947
- Consisted of 23 forum member countries
- Focused on multinational trade agreements

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World Trade Organization (WTO)
replaced GATT in 1994, and it officially commenced on 1995.
aimed on reducing or eliminating trade barriers so that all nations
will benefit. But there were criticisms towards it.

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International Monetary Fund (IMF)
serves as a lender or a last resort of countries which needed financial assistance.

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World Bank (WB)
- focused on the eradication of poverty through funding specific projects of poor
countries, especially, to reach their goals.

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Organization for Economic Cooperation
and Development (OECD)
- formed because member countries wanted to increase the price of oil, which in
the past had relatively low price and had failed in keeping up with inflation.

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European Union (EU)
- composed of twenty seven (27) member-states, most of its members in the
Eurozone adopted euro as the basic currency but some in the Western Europe
did not.

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North American Free Trade Agreement
(NAFTA)
- a trade between United States, Canada, and Mexico.
- created on January 1, 1994
- aims to increase in cooperation for improving working conditions in North
America by reducing barriers to trade as it expands the markets of the three
countries.

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