Learning Module 2

The Contemporary World

Learning Packet 1

Global Economy
 NGEC 0723 The Contemporary World

Learning Packet 1

Global Economy
Introduction

The interconnectedness of the world economy is the forefront market of globalization.

The meeting point of developed and developing economies as well as the emergence of
economic institutions and organizations make everything easier and faster to hold
transactions globally. Global productions are scattered everywhere, operating in
countries where labor cost is cheap and materials are available. For example, Toyota
manufactures its auto parts in countries like the Philippines and Indonesia where there
is high availability of cheap manpower. It offers finished and assembled products in
countries like Singapore and Malaysia where there is a higher demand for cars. This
kind of economic behavior of countries shows how the cycle of economic operation for
a global commodity works. This is also evident in countries in the western region where
there are problems and challenges on the availability of needs and demands. The
strengths of materials of a country could be experienced as weakness on the
unavailability of the other economy or nation.

Objectives

At the end of the learning packet, you will be able to identify the concept of economic
globalization, to examine the various theories and perspectives explaining the practice
of international trade, recognize the roles and functions of different international
economic organizations.

Learning Management System

(Provide the link for the class as used in Google Classroom. Likewise, share links of
other learning materials stored using the Google Drive. In the event that a commercial
LMS will be made available by the University, links shall be refreshed/updated and also
be shared.)

Duration
(Specify the number of hours allotted for this learning packet.)

• Topic 01: Global Economy = 3 hours (1.5 hours self-directed learning

with practical exercises and 1.5 hours
assessment)

Delivery Mode

This learning module will be delivered through online, both asynchronous and
synchronous.

Assessment with Rubrics

An editorial essay will serve as your assessment at the end of this learning packet. You
can access the rubrics for the assessment below.

32
 NGEC 0723 The Contemporary World

Requirement with Rubrics

A short essay will serve as your assessment at the end of this learning packet. You can
access the rubrics for the assessment below.

Readings

Suggested Readings: Access them on the internet just follow the link:

1. “The Globalization of Economic Relations” by Istvan Benczes

2. Wallerstein, Immanuel. 2004. “The Modern World-System as a Capitalist

World Economy: Production, Surplus-Value, and Polarization.” In World-Systems
Analysis: An Introduction. Durham & London: Duke University Press, pp. 23-41
https://en.m.wikipedia.org/wiki/Economic_globalization/

It is important for you to read the above-mentioned readings in order to identify

the meaning of Global Economy, to construct the best tool to promote Global Economy
and to reflect on some global issues concerning Global Economy. Furthermore, this
will prepare you to conceptualize the topics and definition to apply in real-life situation.

33
 NGEC 0723 The Contemporary World

Introduction

This topic discusses the relevance of the economic system

in globalization. It deals on issues concerning the function Key Points:
of international trade, its benefits and damages. This also
explains the importance of domestic and foreign policies in • Economic
international trade and promotion of the global economy. Globalization
The topic will conclude by explaining the roles of • Commodities
international economic organizations in globalization. • Assets and Labor
• International
Pre-Assessment Trading System
• Foreign Trade
Answer the following questions: • Bretton Woods
System
1. In your own understanding, what do you think is the
rationale behind the concept of Global Economy? Definition of Terms:
2. What are the markets that are affected by Globalization?
3. What are some global economic issues that we are aware Economic
of at present? globalization. It
refers to the free
movement of goods,
Lesson Proper capital, services,
technology and
information.
● Review. Talking about globalization, please reflect on
the following: Commodities. It
refers to the goods
What are the underlying philosophies and ideologies in and services of all
globalization? varieties

Labor. It refers to
● Activity the workers who
produce goods and
Enumerate at least five economic issues and explain its services
cause and effect?
Assets and debts. It
● Processing of the Activity. refers to the
securities, bank
Compare your answers with at least one or two classmates. loans and deposits,
titles to land and
Are there similarities or differences? physical capital.
What are the most common answers in your class?
Bretton Woods
System. It refers to
● Brief Lesson. the first system used
to control the value
Globalization of the World Economy of money between
different countries.
What is Global Economy?

Economic globalization – is one of the three main

dimensions of globalization commonly found in academic

34
 NGEC 0723 The Contemporary World

literature, with the two others being political globalization

and cultural globalization, as well as the general term of
globalization.

Economic globalization refers to the free movement of

goods, capital, services, technology and information. It is
the increasing economic integration and interdependence
of national, regional, and local economies across the world
through an intensification of cross-border movement of
goods, services, technologies and capital.

Globalization affects markets of three kinds:

1. commodities – goods and services of all varieties
2. labor – workers who produce goods and services
3. assets and debts – securities, bank loans and deposits,
titles to land and physical capital.

What is the International Trading System?

International Trading System – this includes an open,
rule-based, predictable, nondiscriminatory trading and
financial system as an essential goal. The international
trading system comprises many thousands of unilateral,
bilateral, regional, and multilateral rules and agreements
among more than two hundred nations. Trade negotiations.

Importance of International Trade

1. It enables the fuller utilization of the resources.
2. The trading partners get goods cheaper than otherwise
because every country produces those goods in the
production of which it has to occur at less comparative
cost.

What is Foreign Trade?

Foreign trade – exchange of capitals, goods, and services

across international borders or territories. In most
countries, it represents a significant share of gross
domestic product (GDP).

Advantages of foreign trade

Foreign trade helps each country to specialize in the
production of those goods, which best suits its
environment. It thus leads to maximum use of its natural
resources. It enables a country to obtain goods by
importing which cannot produce due to higher costs at
home.

35
 NGEC 0723 The Contemporary World

Foreign Trade Policy

Are government actions, especially tariffs, import quotas,
and export subsidies, designed to increase net exports by
promoting exports or restricting imports.

Importance of Global Trade

Countries trade with each other when, on their own, they

do not have the resources, or capacity to satisfy their own
needs and wants. By developing and exploiting their
domestic scarce resources, countries can produce a surplus,
and trade this for the resources they need.

The Theory of International Trade

International trade theories are simply different theories to

explain international trade. Trade is the concept of
exchanging goods and services between two people or
entities. International trade is then the concept of this
exchange between people or e entities in two different
countries.

The benefits of trading internationally

• Variety of goods
• Outlet for surpluses
• Reduction of market fluctuations
• Lower costs
• Production efficiency
• Resource specialization
• Innovation
• Investment

Man-made trade barriers come in several forms,

including:
• Tariffs
• Non-tariff barriers to trade
• Import licenses
• Export licenses
• Import quotas
• Subsidies
• Voluntary export restraints

36
 NGEC 0723 The Contemporary World

• Local content requirements

Bretton Woods system

The Bretton Woods system of monetary management
established the rules for commercial and financial relations
among the United States, Canada, Western Europe,
Australia, and Japan after the 1944 Bretton Woods
Agreement.

The first system used to control the value of money

between different countries. It meant that each country had
to have a monetary policy that kept the exchange rate of its
currency within a fixed value-plus or minus one percent-in
terms of gold.

Purpose of the Bretton Woods system

The purpose of the Bretton Woods meeting was to set up a
new system of rules, regulations, and procedures for the
major economies of the world to ensure their economic
stability. To do this, Bretton Woods established The
International Monetary Fund (IMF) and the World Bank.

Bretton Woods conference

The Bretton Woods Conference, officially known as the
United Nations Monetary and Financial
Conference, was a gathering of delegates from 44 nations
that met from July 1 to 22, 1944 in Bretton Woods, New
Hampshire, to agree upon a series of new rules for the
post-WWII international monetary system.

Objective of the Bretton Woods system

The main objectives of the Bretton Woods system are to
achieve exchange rate stability and promote international
trade and development.

The end of the Bretton Woods system

On August 15, 1971, President Richard M. Nixon
announced his New Economic Policy, a program “to create
a new prosperity without war.” Known colloquially as the
“Nixon shock,” the initiative marked the beginning of the
end for the Bretton Woods system of fixed exchange rates
established at the end of World War II.

The Bretton Woods twins refers to the two multilateral

organizations created at the Bretton Woods Conference in
1944. They are: The World Bank and The International
Monetary Fund.

37
 NGEC 0723 The Contemporary World

● Enhancement Activity.

What is the importance of knowing the process, the

different components and even international laws of the
Global Economy? Is it beneficial for us Filipinos?

● Generalization.

Given the stakes involved in economic globalization, it is

perennially important to ask how this system can be made
more just. Although some elements of global free trade can
be scaled back, policies cannot do away with it as a whole.
International policymakers, therefore, should strive to think
of ways to make trading deals fairer. Governments must
also continue to devise ways of cushioning the most
damaging effects of economic globalization, while
ensuring that its benefits accrue for everyone.

● Application.

As a student in contemporary world, how will you accept

the changes that you encountered in the aspect of global
economy?

Learning Packet Discussion Forum

It is highly encouraged to post questions on the discussion

forum. Please raise your questions and other concerns in
our Google Classroom.

Post-Assessment

Answer the following questions:

1. In your own understanding, what do you think is the

rationale behind the concept of Global Economy?
2. What are the markets that are affected by Globalization?
3. What are some global economic issues that we are aware
of at present?

38
 NGEC 0723 The Contemporary World

Activity Sheet

Describe how the following can affect Philippine economy and the people of the
Philippines in general?

1. Importation of rice to satisfy local demands

2. Importation of live chickens and pork to curb the increasing price of it on local
market
3. Export human labor to ease local unemployment

Rubrics:
Category 5 4-3 2-1

The arguments The arguments

The arguments
and thoughts of and thoughts of
and thoughts of
the student are the student are
the students are
Organization and very well somewhat
not organized
Structure organized and organized and
and the question
the question was the question was
was not
completely mostly
answered.
answered. answered.

The student
The student
moves from one The student lacks
Sentence moves smoothly
idea to the next clear connections
Fluency form one idea to
but there is little between ideas.
the next.
variety.

The student
The student The student
makes more than
Grammar and makes no errors makes 1-2 errors
3 errors in
Spelling in grammar or in grammar or
grammar and
spelling. spelling.
spelling.
Based from: https://sites.google.com/a/dmps.k12.ia.us/part-time-indian-final-
project/evaluation/essay-rubric

39
 NGEC 0723 The Contemporary World

Assessment

Assessment 01. Enumerate at least five most pressing global economic problems in
the context of COVID-19 Pandemic and explain how you will utilize the concepts and
models that represents the economic concepts in relation to contemporary world.

Rubrics:
Category 19-20 10-18 1-9

The arguments The arguments

The arguments
and thoughts of and thoughts of
and thoughts of
the student are the student are
the students are
Organization and very well somewhat
not organized
Structure organized and organized and
and the question
the question was the question was
was not
completely mostly
answered.
answered. answered.

The student
The student
moves from one The student lacks
Sentence moves smoothly
idea to the next clear connections
Fluency form one idea to
but there is little between ideas.
the next.
variety.

The student
The student The student
makes more than
Grammar and makes no errors makes 1-2 errors
3 errors in
Spelling in grammar or in grammar or
grammar and
spelling. spelling.
spelling.
Based from: https://sites.google.com/a/dmps.k12.ia.us/part-time-indian-final-
project/evaluation/essay-rubric

40
 NGEC 0723 The Contemporary World

References

De Guzman, J. et al. 2020. The Contemporary World. Mutya Publishing House, Inc.
Valenzuela City

Martinez, R. M, et al. 2018. The Contemporary World. Mindshapers Co. Inc.

Intramuros Manila

Steger, M. B. (2005). Ideologies of Globalization. Journal of Political Ideologies. pp.

11-30

41
 NGEC 0723 The Contemporary World

Learner’s Feedback Form

Name of Student: ___________________________________________________

Program : ___________________________________________________
Year Level : ___________ Section : ___________
Faculty : ___________________________________________________
Schedule : ___________________________________________________

Learning Packet : Number : _________ Title : ______________________

How do you feel about the topic or concept presented?

□ I completely get it. □ I’m struggling.
□ I’ve almost got it. □ I’m lost.

In what particular portion of this learning packet, you feel that you are struggling or
lost?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

Did you raise your concern to you instructor? □ Yes □ No

If Yes, what did he/she do to help you?

________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

If No, state your reason?

________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

To further improve this learning packet, what part do you think should be enhanced?
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________

How do you want it to be enhanced?

________________________________________________________________
________________________________________________________________
________________________________________________________________

42