GED Social Studies
World Systems & Globalization
Globalization is the tightening web of trade, money, information, and people across borders. Countries trade because making everything yourself is expensive; specializing and swapping makes both sides richer on average — while creating winners, losers, and new dependencies the test asks you to weigh.
The words first
- globalization
- growing economic and cultural interconnection across borders
- trade / imports / exports
- goods bought from abroad / sold abroad
- specialization
- focusing on what you produce best and trading for the rest
- interdependence
- countries relying on each other's economies — shocks travel
- tariff
- a tax on imports, protecting home industries but raising prices
- outsourcing
- moving production where labor or costs are lower
The method
WHY TRADE AT ALL — specialization in miniature
country A grows coffee cheaply; B builds machines cheaply
each specializes, they swap →
more coffee AND more machines exist than if each
tried to make both
THE LEDGER OF GLOBALIZATION
gains costs
cheaper goods for consumers factory towns lose jobs abroad
bigger markets for exporters local industries can be undercut
ideas and tech spread fast shocks spread fast too
(one country's crisis → everyone's)
TARIFF MECHANICS
tariff on imported steel:
home steelmakers → protected, can charge more
everything BUILT from steel → pricier for consumers
exporting country → may retaliate with its own tariffs
INTERDEPENDENCE TEST CASE: a drought in one wheat giant
raises bread prices on other continents
Worked all the way through
The problem
A country puts a steep tariff on imported cars. Trace the effects on three groups: domestic carmakers, car buyers, and the exporting country.
- Step 1 — Domestic carmakers.Imported rivals now cost more, so home producers gain customers and room to raise their own prices. They win — this is the tariff's purpose.
- Step 2 — Car buyers.Every option costs more: imports carry the tax, domestic makers face less price pressure. Consumers pay the tariff in the end.
- Step 3 — The exporting country.Its sales shrink — and it often retaliates with tariffs of its own, hurting the first country's exporters.
- Step 4 — Sum it honestly.Protection is real but not free: it transfers cost from one industry to all consumers, and risks a trade war.
On the board
tariff = tax on imported cars
home makers: protected, win
the intended effect
buyers: all prices up, lose
who actually pays
exporter: sales down → retaliation
protection has a price tag
Answer
Domestic makers gain, consumers pay more, and the exporter loses sales and may retaliate
A second one, in a different form
A flood shuts down the world's biggest computer-chip region, and within months cars and phones get scarce and pricier everywhere. What does this show?
one region supplies a key part worldwide
specialization
its shock travels through supply chains
interdependence
efficiency and vulnerability arrive together
the tradeoff
Answer
Global interdependence — specialized supply chains spread both goods and disruptions worldwide
The usual mistake
Assuming globalization only helps or only harms. Different groups experience it differently.
Check yourself
For any trade-policy question, walk the three seats — producer, consumer, trading partner — because the test's wrong answers are the ones that notice only one seat. Every policy in this topic helps someone by charging someone else.
Practice it
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