4.1 - Globalisation

Question 1

What’s the definition of imports?

Answer 1

Goods being brought into the country (costs the country money)

Question 2

What’s the definition of exports?

Answer 2

Goods being sold to other countries (makes the country money)

Question 3

STRONG pound/ £ appreciates =

Answer 3

Imports - cheaper
Exports - dearer

Question 4

WEAK pound/ £ depreciates =

Answer 4

Imports - dearer
Exports - cheaper

Question 5

What are causes of globalisation?

Answer 5

• growth of MNC’s
• reduction of trade barriers
• reduced costs of transport & communication

Question 6

What are consequences of globalisation?

Answer 6

• increase in trade as a proportion of GDP
• free movement of labour & capital between countries
• free interchange of technology/(IP- patents/copyright)

Question 7

What are protectionist policies?

Answer 7

Actions taken by countries to try stop or reduce the amount of goods and services coming into the country

Question 8

What are examples of protectionist policies?

Answer 8

• tariffs
• quotas (physical limits on number of units imported)
• government legislation
• domestic subsidies (money given to help domestic producers)

Question 9

What are consequences of tariffs?

Answer 9

• tax revenue for government
• makes domestic businesses more competitive

Question 10

What are consequences of legislation?

Answer 10

• may provoke retaliation
• employees jobs more secure (less competition)

Question 11

What’s the consequences of subsidies?

Answer 11

• helps protect domestic jobs
• cost for government

Question 12

What are examples of HDI:

Answer 12

• life expectancy
• income per person

Question 13

What’s the difference between emerging economies and developed economies

Answer 13

Emerging - large GDP growth, poverty/poor infrastructure
Developed - smaller GDP growth, higher income

Question 14

What are the indicators of growth

Answer 14

• GDP
• literacy
• health
• HDI (human development index)

Question 15

What is GDP

Answer 15

A measure of all the goods and services produced in a country divided by the population number

Question 16

What is FDI

Answer 16

Foreign direct investment
- direct investment into a country, making them a MNC

Question 17

Describe how business specialisation leads to competitive advantage

Answer 17

If a country specialises in the production of a certain good it can trade them with other countries and move into international markets to trade

Question 18

What are the implications of economic growth (increasing GDP) for businesses

Answer 18

• new markets to sell to
• reduced costs of production & cheaper labour costs & raw materials
• glocalisation opportunities

Question 19

What are examples of FDI

Answer 19

• buying assets in another country
• setting up a manafacturing site in another country

Question 20

What are reasons/benefits of FDI

Answer 20

• access to cheaper local resources
• access to local knowledge and skills

Question 21

What are domestic subsidies

Answer 21

Government grants given to support exporting businesses so they can lower their prices and compete internationally

Question 22

What are the benefits of trading blocs to businesses

Answer 22

• opportunities to expand into new markets
• support from the government to allow businesses to maintain their competitiveness within the bloc
• free movement of labour - businesses can source wider range of workers, with lower wages so reduced cost for the business

Question 23

What are the drawbacks of trading blocs to businesses

Answer 23

• increased competition between countries within the bloc
• rules and regulations
• tensions/retaliations from counties outside the bloc