Question

Essay on how does globalization affect the economy.​

Answer 1

Globalization is shown to lead to innovation, which in turn affects the overall development of an economy. The productivity and the prices of any goods being exported or imported from a country are highly affected by globalization, thus affecting the entire economy.

Benefits of Globalization: Well managed open economies have grown at rates that are on average 2 ½ percentage points higher than the rate of growth in economies closed to the forces of globalisation. Countries which have had faster economic growth have then been able to improve living standards and reduce poverty.

While globalization has radically increased incomes and economic growth in developing countries and lowered consumer prices in developed countries, it also changes the power balance between developing and developed countries and affects the culture of each affected country.

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