MACRO ECONOMICS

Macro Economics

Macro Economics

Ans. 2: Globalization & its Potential Dangers

Globalization is a process of interaction and integration among the people, companies, and governments of different nations, a process driven by international trade and investment and aided by information technology (Bakacs, 2005). This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.

Globalization is not new, though (World Bank, 2006). For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great distances, such as through the famed Silk Road across Central Asia that connected China and Europe during the Middle Ages. Likewise, for centuries, people and corporations have invested in enterprises in other countries. In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914. But policy and technological developments of the past few decades have spurred increases in cross-border trade, investment, and migration so large that many observers believe the world has entered a qualitatively new phase in its economic development.

Globalization has a several potential dangers for developing countries like Pakistan (Gabor, 2005). Globalization is a rapidly changing process that has shifted its dimension from merely One World Economy to complete integration that includes economic, social, cultural, and political aspects. This article states the present trend and move of global economy along with its process in legal and institutional aspects. There are potential dangers as well as controversies of globalization especially from the developing countries perspectives.

Also globalization has some potential dangers for the developed countries like United Kingdom. Note that although we have divided the following into pro- and anti-globalization viewpoints, very few of the writers stand firmly on one side of the issue. Instead, many of these quotations are fraught with mixed feelings on the potential advantages and dangers of globalization (Dudwick, 2005). Additionally, some critics complain that the very term "globalization" is too loaded with multiple meanings to hold any significance whatsoever. The increasing globalization of U.K. corporations gives them the leverage to hold down wages and resist unionization. Average real wages (corrected for inflation) have been falling since the early 1970s.

Ans. 3: Unemployment

Unemployment is an economic condition marked by the fact that individuals actively seeking jobs remain unhired (Dew-Becker, 2005). Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances.

Frictional Unemployment

Frictional unemployment occurs when a person is out of one job is searching for another. It generally requires some time before a person can get the next job. During this time he is frictionally unemployed. The problem of frictional unemployment is minimized with the development of efficient labour markets (Reichmann, 2005). The time period of shifting from one job to another is almost nil. However, imperfect information may aggravate the problem of frictional ...