Globalisation

Question 1

What is globalisation

Answer 1

increasing integration of economies internationally

Question 2

three main characteristics of globalisation

Answer 2

• Free movement of capital and labour across borders
• free trade in goods and services between different countries
• Availability of technology and knowledge between countries

Question 3

other impacts of globalisation

Answer 3

• increase in financial capital flows between countries
• more international trade
• de-industrialisation of HIC, industrialisation of LIC
• increase in foreign ownership of firms

Question 4

MNC

Answer 4

Multi National Corporation

Question 5

what attracts MNC’s

Answer 5

• Cheap and available labour
• Good transport links
• Lenient Government policies on investment and environmental
• Access to different markets

Question 6

Causes of Globalisation

Answer 6

• Trade Liberalisation
• Improved communication
• cheaper and quicker transport
• Increased number of hugely influential MNC that put FDI into LICs
• Increased specialisation
• Growth in international trading blocs

Question 7

Trade Liberalisation

Answer 7

Removal or reduction of trade restrictions

Question 8

Benefits of globalisation

Answer 8

• Increased specialisation in goods where the country has a comparative advantage increases output and efficiency
• Producers benefit from economies of scale so lower production costs and lower prices
• Greater variety
• Rise in World GDP and reduction in poverty so better worldwide living standards
• Increased Growth and employment
• Increased Innovation due to more competition and free sharing of ideas

Question 9

Problems with globalisation

Answer 9

• Rising prices of goods worldwide as people have more money to spend
• Economic dependency so shocks will have greater effects, unstable
• Increased world trade led to global BoP imbalances leading to protectionism
• specialisation can lead to overreliance or unflexibility

Question 10

Positive effects of MNCs

Answer 10

• FDI by MNC creates new jobs and brings new skills and wealth
• MNC buy local goods so help locals to expand businesses and bring in foreign currency
• MNC economies of scale so their more efficient
• Provide employment which raises living standards

Question 11

Negative effects of MNCs

Answer 11

• exploit workers with low wages
• Force local firms out of business
• Influence and pressure Governments policies to their advantage and the countries detrement
• withdraws money from countries circular flow

Question 12

Why is globalisation bad for the environment

Answer 12

Increases in industrialisation and international trade means that more fossil fuels are used which contributes to pollution and climate change.

Question 13

Benefits of globalisation in LICs

Answer 13

• Provides jobs with stable wage reducing unemployment
• More efficient production techniques and technology are brought to the country
• increase of FDI

Question 14

problems of globalisation in LICs

Answer 14

• MNC profits don’t stay in home country so does nothing to help poverty
• Skilled workers will leave to work in more developed higher paying countries, brain drain and reduces growth
• Local firms can’t compete with MNCs

Question 15

problems of globalisation in HICs

Answer 15

• Cheap overseas manufacturing lead to severe reduction in industries causing structural unemployment
• de-industrialisation leads to fall in exports
• success of NEE damaged HICs
• Increased imports worsens BoP

Question 16

benefits of globalisation in HICs

Answer 16

• Cheaper raw materials and production costs
• MNCs gain access to cheap labour so low production costs
• Increases innovation through competition