Globalisation

Question 1

What factors contribute to globalisation?

Answer 1

1. Containerisation
2. Technological change
3. Differences in tax systems
4. Less protectionism
5. Growth of MNCs and multinational companies
6. Economies of scale

Question 2

What are some characteristics of globalisation?

Answer 2

1. Greater trade across borders in goods and services
2. Increase in transfers of capital - expansion of FDI
3. Development of global brands that serve income in lower middle and high income countries
4. Greater use of offshoring and outsourcing of production
5. High levels of labour migration
6. New nations joining the trading system
7. Increasing spending on capital investment
8. Makes the world economy more connected

Question 3

What is containerisation?

Answer 3

A shipping method in which a large amount of material is packaged into large standardised containers

Question 4

How does containerisation contribute to globalisation?

Answer 4

The lower unit costs of shipping products around the global economy helps bring prices in the country of manufacture closer to those in export markets making markets more challenged globally

Question 5

How does technological change contribute to globalisation?

Answer 5

It has reduced the cost of transmitting and communicating information

Question 6

How does a difference in tax investment contribute to globalisation?

Answer 6

Businesses wanting to take advantage of lower labour costs and other advantages abroad has encouraged countries to adjust their tax systems to attract FDI

Question 7

How does less protectionism contribute to globalisation?

Answer 7

Old form of non tariff protection has been dismantled - borders have opened and import tariff levels have fallen however there has been a rise in non tariff barriers as countries have struggled to achieve real economic growth

Question 8

How has the growth of MNCs and transnational companies contributed to globalisation?

Answer 8

Global businesses have invested a lot into growing internationally

Question 9

What are the benefits/gains from globalisation?

Answer 9

1. Access to new cultures/wider customer range
2. Access to new markets
3. Lower costs for products
4. Free movement of labour
5. Gains from new innovations/technology/skills

Question 10

What are some of the disadvantages/risks to globalisation

Answer 10

1. Unemployment
2. Dominant global brands
3. Inflation
4. Vulnerability to external shocks