Globalisation

Question 1

Define Globalisation.

Answer 1

Globalisation involves the increased integration and interdependence of national economies.

Question 2

What does Globalisation reflect?

Answer 2

• Globalisation reflects the increased importance of the whole international economy.

Question 3

What does Globalisation involve?

Answer 3

Globalisation involves increased international trade, increased inward investment and an increased role for global multinational companies.

Question 4

Reasons for Growth of Globalisation.

Answer 4

• National Economies are becoming more closely integrated with each other.
• Increase in World Trade, Tariffs and other impediments to world trade have gradually been reduced leading to an increase in world trade.
• The WTO has been instrumental in bringing about a more integrated and interdependent global economy
• Economies tend to move in trade cycles together. A slow down in US growth has an impact on the whole world economy, because of the importance of trade.
• Monetary Policy is linked between the economies, if US cuts its interest rate, this is likely to lead other countries to cut theirs

Question 5

Benefits of Globalisation.

Answer 5

• Increased trade
• Increased economies of scale enabling lower prices
• Increased competition pushing down prices
• Increased choice of goods, services and opportunities for work

Question 6

Costs of Globalisation.

Answer 6

• Growth of global monopolies with opportunity to exploit consumers
• Environmental costs from increased use of raw materials.