Which statement best defines globalization and identifies two typical economic effects?

• A. Globalization is the increasing interconnectedness of economies, societies, and cultures through cross-border flows of goods, services, capital, people, and information; two effects are expanded trade and integrated supply chains, and increased capital mobility/foreign investment.
• B. Globalization is the spread of a single culture worldwide; two effects: more tourism and more foreign languages.
• C. Globalization is only trade expansion; two effects: wage stagnation and reduced technology transfer.
• D. Globalization refers to domestic market concentration; effects: decreased competition and reduced foreign investment.

Answer: (A)

Globalization is the growing interconnectedness of economies, societies, and cultures through cross-border flows of goods, services, capital, people, and information. This interconnectedness expands opportunities for trade and creates globally coordinated production networks—two typical economic effects. First, trade grows and supply chains become integrated across borders, with production stages spread across multiple countries. Second, capital becomes more mobile, with increased foreign investment and cross-border financial flows, linking economies more closely. Other descriptions shift toward culture or tourism or misstate the economic focus, which isn’t about domestic market concentration or only trading, and don’t capture the two core economic effects described here.