M I D T E R M (M o d u l e 7) 1

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Course Code : GE 113

Description : The Contemporary World

Schedules : MWF 12:00-1:00p.m. (HM2)

MWF 1:00-2:00p.m. (HM1)
MWF 2:00-3:00p.m. (Educ)
TTH 3:00-4:30p.m. (BSBA)

Online Sessions : Every Monday 12:00-3:00p.m. (HM2, HM1, Educ)

Every Tuesday 3:00-4:30p.m. (BSBA)

Instructor : Delto Michael A. Abarquez, Jr.

MODULE 7

Week 8 October 11 – 16, 2021

Instructions : After reading the content of this module, answer the assessment at the
end of lesson. Please send me your answer via email
(deltoabarquez@gmail.com) on or before Oct. 16, 2021 (Saturday)
or your most convenient time. Don’t forget to indicate name of subject,
section and time of schedule.
If you have any question or concerns, please do not hesitate
to contact me during the scheduled time. Thank you!

Objectives : At the end of the lesson, the student will:

1. Understand why economy as a social institution as one of the
biggest impact on society and that economy is not only numerical
term but it is compose of people
2. Learn the contributions of different financial and economic
institutions that facilitated the growth of global economy
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Module 7

MARKET INTEGRATION occurs when prices among different locations or

related goods follow similar patterns over a long period of time. Groups of goods often move
proportionally to each other and when this relation is very clear among different markets it is
said that the markets are integrated. Thus, market integration is an indicator that explains how
much different markets are related to each other. A marketer plays the role of an integrator in the
sense that he collects feedback or vital inputs from other channel members and consumers and
provides product solutions to customers by coordinating multiple functions of organization.
Apart from integrating world markets, there is an increasing tendency to create new regional
integration schemes. The European Union (EU) is one of the most prominent examples. This
chapter discusses the different stages of economic integration and their impact on agricultural
markets, welfare, income distribution and market instability. Integration can be achieved by
different means. Reducing non-tariff and tariff barriers to trade can be the main tool for
integrating markets. This type of integration is known as negative integration. The term implies
that a government’s only role is to withdraw from interference in the movement of goods and
factors of production across national borders. Indeed, this may be sufficient to integrate some
markets for manufactured goods, where governmental regulations play a minor role. The
situation is different for agriculture. Most nations regulate their agricultural and food markets
more intensively than other sectors.

Market integration refers to how easily 2 or more markets can trade with each other. In case of
high integration, it means that there is low barriers on trade as well as prices are similar in the
two markets. In case of low integration, high barriers to trade as well prices fluctuate between
these markets. Foreign trade helps the integration of markets because it reduces barriers to trade
and increases fluidity between markets. As foreign trade increases, the price will go down until it
reaches the price which is in the original market from where the trade has been made.
Market integration allows price signals to be transmitted from one market to another. When
markets are well-integrated, prices become more stable, and household food security is likely to
be improved and can obtain food at more affordable prices.

There are two forms of market integration: spatial market integration (price at a destination

market equals the price at source market augmented by transaction costs) and temporal market
integration (where there is no inter-temporal additional benefit in building stocks over time
(also known as hoarding).

Role of International Financial Institutions in the creation of a global economy

In many parts of the world, international financial institutions (IFIs) play a major role in the
social and economic development programs of nations with developing or transitional
economies. This role includes advising on development projects, funding them and assisting in
their implementation.
Characterized by AAA-credit ratings and a broad membership of borrowing and donor countries,
each of these institutions operates independently. All however, share the following goals and
objectives:

 to reduce global poverty and improve people's living conditions and standards;
 to support sustainable economic, social and institutional development; and
 to promote regional cooperation and integration.

IFIs achieve these objectives through loans, credits and grants to national governments. Such
funding is usually tied to specific projects that focus on economic and socially sustainable
development. IFIs also provide technical and advisory assistance to their borrowers and conduct
extensive research on development issues. In addition to these public procurement opportunities,
in which multilateral financing is delivered to a national government for the implementation of a
project or program, IFIs are increasingly lending directly to non-sovereign guaranteed (NSG)
actors. These include sub-national government entities, as well as the private sector.
M I D T E R M (M o d u l e 7) 1
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M I D T E R M (M o d u l e 7) 1
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MODULE 7
( Assessment )

NAME: ROMEO R. ORACION JR.

SUBJECT: GE 113 CONTEMPORARY WORLD

SECTION:BSBA/MODULAR TIME: 3:00-4:30 PM

Instruction:
It is very important to indicate your subject section and time before answering the process
questions.

A. Process Questions:

1. Describe the role of at least three (3) international financial institutions you find most
appealing in the creation of a global economy.

 International financial institutions (IFIs) play an important role in the social and
economic development of countries with emerging or transitional economies in many
regions of the world. This function include providing advice on development projects, as
well as funding and aiding with their implementation. Each of these institutions functions
independently, with AAA credit ratings and a diverse membership of borrowing and
donor countries. The following goals and objectives, on the other hand, are shared by all:
(1) to alleviate global poverty and improve people's living conditions and standards; (2)
to promote regional cooperation and integration; (3) and to support sustainable economic,
social, and institutional growth. IFIs help national governments attain these goals by
providing loans, credits, and grants. Typically, such money is tied to specific projects that
promote economic and social sustainability. IFIs also aid their borrowers with technical
and consulting services and perform substantial research on development concerns. IFIs
are increasingly lending directly to non-sovereign guaranteed (NSG) players, in addition
to these public procurement opportunities, in which multilateral finance is supplied to a
national government for the implementation of a project or program. Subnational
government entities, as well as the commercial sector, are among them. Canada is a
partner and stakeholder in the World Bank, the world's largest international financial
institution, as well as many regional development banks. This membership allows
Canadian businesses and people to bid for contracts in bank-funded projects and
activities. The Offices of Liaison with International Financial Institutions (OLIFIs) in
Canada can assist you in learning more about IFIs, including where and how money are
spent, as well as how to locate and pursue these possibilities. OLIFI is a good place to
start if you want to learn more.

Note:

Please send me your answer via email (deltoabarquez@gmail.com) on or before October 16,
2021 (Saturday) or at your most convenient time. Don’t forget to indicate name of subject,
section and time of schedule.