"Globalization and the World Economy"

How can international organizations affect globalization?

• The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.

How can international organizations affect globalization?

• Greenpeace is the leading independent campaigning organization that uses peaceful protest and creative communication to expose global environmental problems and to promote solutions that are essential to a green and peaceful future.

 What are Multinational Corporations?

• Multinational Corporation- a firm that has factories, offices or branches in two or more countries
• Ex. Microsoft, Toyota, Sony, Wal-Mart, McDonalds, Sony etc.
• Numerous large companies are becoming multinational due to Globalization

What are Multinational Corporations?

• Many companies produce their products in other countries or will build a plant in in the country the export their products to
• Why?
• Cheaper labor
• Save on shipping cost
• Cut import/export tariffs

 Exchange Rates

• Foreign Exchange Market- where currency, from numerous countries, are bought and sold
• Exchange Rate- The value of a country’s currency in relation to another country’s currency
• Ex. 1 Euro = $1.294
• Ex. 1 CAD = $0.978
• Ex. 1 MX Peso = $0.080

Exchange Rates Fixed Rate of Exchange Flexible Exchange Rate

• Currency values did not change daily and were set in regards to gold reserves (until 1971)
• Governments can set the value of their currency
• Flexible Exchange Rate
• Currency values are set in relations to supply and demand
• Traded in a manner similar to the stock market

Exchange Rates

• What impact does the Foreign Exchange Rate have on our economy?
• Can influence the cost of goods imported/exported
• Can lower or increase the price of finished goods due to cost of raw materials