Define globalisation
Growing interdependence of countries and increasing integration of the world’s economies into a single international market
What four things does globalisation involve the free movement of?
- Goods and services (free trade)
- Labour
- Capital
- Technology/Capital
List 4 key factors that have contributed to globalisation
- Improvements in transport (cheaper, quicker, reliable)
- Improvements in IT and communication
- Growth of international financial markets
- Expansion of TNCs
How have improvements in transport contributed to globalisation?
Quick, reliable, and cheap transport allows production to be separated across different countries
How has trade liberalisation contributed to globalisation?
Reduced protectionism (tariffs, quotas) has made it cheaper and easier to trade between countries
What role have TNCs played in driving globalisation?
TNCs operate globally to maximise profits
How do consumers benefit from globalisation?
- Greater choice (wider range of goods from around the world)
- Lower prices (firms exploit comparative advantage and lower costs).
How can globalisation negatively affect consumers?
Rising incomes in developing countries increase demand → can push up global prices
How has globalisation affected manufacturing workers in developed countries?
Large-scale job losses as manufacturing jobs move to lower-cost countries
How does migration, driven by globalisation, affect workers?
May lower wages for some, but migrants bring skills and increase AD → creates more jobs.
What are the positive and negative impacts of TNCs on workers in developing countries?
Positive: Training, new jobs.
Negative: Poor conditions and low wages
How do producers/firms benefit from globalisation?
- Source products from more countries
- Sell in more countries (reduces risk)
- Access cheaper labour
How can globalisation negatively affect some producers?
Firms unable to compete internationally will lose out and may fail
How can governments benefit from globalisation?
Higher tax revenue (from TNCs and their employees)
How can globalisation negatively affect governments?
- TNCs engage in tax avoidance
- TNCs may bribe/lobby governments → corruption
What are the negative environmental impacts of globalisation?
- Increased world production → higher demand for raw materials (resource depletion)
- Higher pollution
What is a potential positive environmental impact of globalisation?
Global cooperation to tackle climate change; sharing of green technology and ideas.
How can globalisation increase economic growth?
TNC investment = injection into economy (multiplier effect)
How can globalisation hinder economic growth?
TNCs may cause political instability (supporting unpopular regimes)
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2.1.1 - Economic growth9
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2.1.2 - Inflation13
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2.1.3 - Employment and unemployment19
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2.1.4 - Balance of payments9
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2.2.1 - The characteristics of AD4
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2.2.2 - Consumption (C)6
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2.2.3 - Investment (I)9
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2.2.4 - Government expenditure (G)3
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2.2.5 - Net trade (X-M)5
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2.3.1 - The characteristics of AS4
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2.3.2 - Short-run AS3
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2.3.3 - Long-run AS5
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2.4.1 - National income8
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2.4.2 - Injections and withdrawals2
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2.4.3 - Equilibrium levels of real national output2
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2.4.4 - The multiplier9
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2.5.1 - Causes of growth8
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2.5.2 - Output gaps7
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2.5.3 - Trade (business) cycle9
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2.5.4 - The impact of economic growth10
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2.6.1 - Possible macroeconomic objectives10
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2.6.2 - Demand-side policies16
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2.6.3 - Supply-side Policies15
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2.6.4 - Conflicts and trade- offs between objectives and policies9
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4.1.1 - Globalisation19
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4.1.2 - Specialisation and trade16
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4.1.3 - Pattern of trade8
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4.1.4 - Terms of trade9
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4.1.5 - Trading blocs and the World Trade Organisation (WTO)29
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4.1.6 - Restrictions on free trade27
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4.1.7 - Balance of payments20
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4.1.8 - Exchange rates22
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4.1.9 - International competitiveness18
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4.2.1 - Absolute and relative poverty12
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4.2.2 - Inequality14
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4.3.1 - Measures of development11
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4.3.2 - Factors influencing growth and development20
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4.3.3 - Strategies influencing growth and development32
