Understanding Globalization from a World Perspective The word “globalization” as defined by the Merriam-Webster dictionary is “the development of an increasingly integrated global economy, characterized primarily by free trade, from the free flow of capital and the exploitation of cheaper foreign labor markets." Global expansion extends goods and services to a world market, through investment, services and trade. This global strength is driven by economic investments in foreign markets. The growth of factoring business is driven by financial institutions, governments and personal investors in the pursuit of profits. The growth of technology and globalization has been seen as both a cause and an effect of the exponential growth of recent decades. Since 1950, international trade has increased twenty-seven times. In the 1950s, international trade amounted to approximately $100 billion and reached a peak of over $10 trillion in 2007 (WTO, 2013). Following the 2008 U.S. stock market crash, international trade declined by approximately $2 billion. However, international trade recovered with an increase of approximately 6% until 2011, when trade remained stable at approximately $11.5 billion (WTO, 2013). In the last two years this problem has been exacerbated by difficulties in the European Union and the economic recession in China. However, international trade is still thriving and is pushing developed economies to new heights and supporting developed economies to maintain a balanced debt-to-GDP ratio. Capitalizing on trade in a global market increases production levels and decreases costs associated with production. It allows countries and workforces to channel people and resources more effectively, allowing them to do things in the most efficient way given… half of the paper… consumption of goods now affects money exchange rates. How does trade affect the value of money? This is directly linked to exchange rates. The exchange rate is the amount of currency equivalent to another country's currency. Typically when the exchange rate depreciates, there is an increase in the import of goods from abroad. On the contrary, when the exchange rate appreciates, imports decrease. The reason for this is that if a product that once cost $1 USD and the product increases or decreases its price, the demand for the product fluctuates with the dollar exchange rate. This affects multiple currencies and economies, causing a fluctuation in demand for imports and exports. We can now conclude that the need for trade is indeed mandatory to expand and grow economies across the world. International trade is good for everyone.