transactions without the government’s approval.

The question of how to organize economic institutions is typically not a straightforward choice between all

market or all government, but instead involves a balancing act over the appropriate combination of market

freedom and government rules.

FIGURE 1.10 Globalization Cargo ships are one mode of transportation for shipping goods in the global economy.

(Credit: "Cargo Ship" by Raul Valdez/Flickr Creative Commons, CC BY 2.0)

The Rise of Globalization

Recent decades have seen a trend toward globalization, which is the expanding cultural, political, and

economic connections between people around the world. One measure of this is the increased buying and

selling of goods, services, and assets across national borders—in other words, international trade and financial

capital flows.

Globalization has occurred for a number of reasons. Improvements in shipping, as illustrated by the container
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