Short Answer 
The internationalization of production enables access to diverse goods and services through trade, fostering a global market. Increased contestability enhances competition among nations, benefiting consumers with more options and innovation. Lastly, economic interdependence among countries brings both shared growth and vulnerabilities to global economic shifts.
Step 1: Understanding Internationalization of Production
The first key aspect of globalization involves the internationalization of production, where countries interact through trade. This process allows residents of one nation to access goods and services from another. It’s crucial for facilitating an interconnected market and it enables a diverse range of products available to consumers globally. Examples include:
- Imported electronics from Asia
- Coffee sourced from South America
- Automobiles manufactured in different countries
Step 2: Recognizing Market Contestability
The second aspect reflects the greater contestability of international markets, which indicates increased competition among countries. This means that businesses from various nations can enter each other’s markets, leading to a more dynamic and competitive global economy. The implications of this are significant for consumers, providing:
- More options and lower prices
- Innovation driven by competition
- Opportunities for businesses to expand internationally
Step 3: Acknowledging Economic Interdependence
The third and final aspect of globalization is the increased interdependence of national economic systems. Countries rely on each other for trade, investment, and resources, creating a complex web of economic relationships. This interdependence can lead to both benefits, such as shared growth, and challenges, such as vulnerability to global economic shifts. Key points include:
- Shared economic growth and stability
- Vulnerability to external economic crises
- Collaboration on global issues like climate change