How did the global economy integrate, and what models and institutions shaped it?
Topic 9.5 Economics in the Global Age: the economic changes of globalization, including free-market neoliberalism, multinational corporations, free-trade agreements, and the rise of new economic powers.
A focused answer to AP World History Topic 9.5, explaining economics in the global age: the spread of free-market neoliberalism, the rise of multinational corporations and global supply chains, free-trade agreements and blocs, and the emergence of new economic powers like China and India.
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What this topic is asking
Topic 9.5 covers economics in the global age. It asks you to explain the economic changes of globalization: the spread of free-market neoliberalism, the rise of multinational corporations and global supply chains, the growth of free-trade agreements and blocs, and the emergence of new economic powers such as China and India that shifted the global economic balance.
What "economics in the global age" means
Neoliberalism and free trade
A free-market ideology spread worldwide.
Multinational corporations and global supply chains
Giant firms organize global production.
A defining feature of the global economy is the multinational corporation - a firm that operates across many countries. These corporations organize global supply chains: a single product may be designed in one country, assembled from parts made in several others, and sold worldwide, taking advantage of cheaper labor or resources in different places. This let companies cut costs and integrate markets, but it also moved manufacturing jobs from wealthy to lower-wage countries, a source of the backlash in Topic 9.8. Multinationals became some of the most powerful economic actors on the planet.
The shifting balance of economic power
New powers rose.
The global economic balance shifted dramatically:
- China. After opening its economy to markets and trade from the late twentieth century, China became the world's leading manufacturer and a top economic power, transforming the global economy.
- India and emerging economies. India and other economies (Brazil, the "Asian Tigers," and others) grew rapidly, shifting economic weight toward Asia and the global South.
- A more multipolar economy. Economic power, long concentrated in the West, spread to new centers, reshaping global politics.
This shift reversed, in part, the concentration of economic power that industrialization had produced (Topics 5.4 and 6.4).
Try this
Q1. Name the free-market ideology favoring free trade, privatization, and deregulation that dominated the global economy after the late twentieth century. [Recall]
- Cue. Neoliberalism.
Q2. Explain how multinational corporations organize global supply chains. [Short explanation]
- Cue. A multinational corporation may design a product in one country, assemble it from parts made in several others, and sell it worldwide, taking advantage of cheaper labor or resources in different places to cut costs and integrate global markets.
Exam-style practice questions
Practice questions written in the style of College Board exam questions on this dot point, with worked answer explainers. The year tag is the paper they imitate, not the source.
AP 2020 (style)3 marksBriefly identify ONE feature of the global economy after 1900. Briefly explain ONE economic policy associated with neoliberalism. Briefly explain ONE new economic power that rose in this period.Show worked answer →
A Short Answer Question (SAQ), 3 points, one per bullet.
A. Identify: multinational corporations operating across many countries became central to the global economy.
B. Neoliberal policy: neoliberalism favored free markets, free trade, privatization, and reduced government regulation of the economy.
C. New economic power: China rose to become a major economic power after it opened its economy to markets and trade from the late twentieth century.
Each bullet must be concrete.
AP 2022 (style)6 marksEvaluate the most significant economic change of the global age in the period c. 1900 to the present.Show worked answer →
A Long Essay Question (LEQ), scored on the 6-point change rubric.
Thesis (1): "The most significant economic change of the global age was the integration of the world into a single market dominated by multinational corporations and free trade, though the spread of neoliberal policy and the rise of new economic powers like China were also profound changes."
Contextualization (1): situate the changes in postwar growth, the end of the Cold War, and new technology.
Evidence (2): neoliberalism and free trade; multinational corporations and global supply chains; trade agreements and blocs; the rise of China and other economies.
Analysis (2): explain HOW the world economy integrated into a single market, then add complexity by weighing it against the spread of neoliberal policy and the shift of economic power."
Related dot points
- Topic 9.1 Advances in Technology and Exchange: the technological advances in communication, transportation, energy, and medicine that accelerated globalization after 1900.
A focused answer to AP World History Topic 9.1, explaining the technological advances that accelerated globalization: communication from the radio to the internet, transportation from air travel to container shipping, new energy sources, and medical and agricultural breakthroughs.
- Topic 5.7 Economic Developments and Innovations in the Industrial Age: the new financial and business institutions, including corporations, banks, and stock markets, and the rise of transnational businesses and free-market capitalism.
A focused answer to AP World History Topic 5.7, explaining the economic innovations of the industrial age: the corporation and limited liability, stock markets and banks, transnational businesses like the HSBC and Unilever, and the spread of free-market capitalism.
- Topic 8.8 End of the Cold War: the causes and consequences of the end of the Cold War, including the collapse of the Soviet Union, reforms like glasnost and perestroika, and the emergence of a new global order.
A focused answer to AP World History Topic 8.8, explaining the end of the Cold War: Gorbachev's reforms of glasnost and perestroika, the fall of the Berlin Wall and Soviet collapse in 1991, economic and military strain, and the consequences for the new global order.
- Topic 9.8 Resistance to Globalization After 1900: the economic, cultural, and political resistance to globalization, including anti-globalization movements, religious fundamentalism, nationalism, and terrorism.
A focused answer to AP World History Topic 9.8, explaining resistance to globalization: economic anti-globalization movements, cultural and religious resistance including fundamentalism, the revival of nationalism and protectionism, and political violence and terrorism.
- Topic 9.9 Institutions Developing in a Globalized World: the international institutions that developed to govern a connected world, including the United Nations, the IMF and World Bank, the WTO, NGOs, and regional bodies.
A focused answer to AP World History Topic 9.9, explaining the institutions of a globalized world: the United Nations for peace and rights, the IMF, World Bank, and WTO for the global economy, NGOs and multinational corporations, and regional bodies like the European Union, with their powers and limits.
Sources & how we know this
- AP World History: Modern Course and Exam Description — College Board (2020)