HSC ECONOMIC TEXT BOOK..TOPIC 1 SUMMARIES

HSC Economic Topic One Summary Globalization refers to the increasing economic integration between countries leading to the emergence of a global market place to a single market, where countries are becoming increasingly linked by common technologies and the customization of goods and services marketed and distributed on a global rather than national base Gross World Product is defined as the total market value of good and services produced by all countries at a given time …

…reduced the extent to which countries can manage their macroeconomic polices independently - In an environment of rapid and large financial flows between economies, central banks need to set their interest rates in response to changing interest rate levels in other countries. Finance will otherwise flow away to countries with more attractive interest rates. - Fiscal policy is constrained by the need to retain the confidence of financial markets, by sustaining balance or surplus outcomes