Topic 6 The impact of global events and ethics Flashcards
Positives for globalisation
Can travel easier
Communication is easier and cheaper
Trade - Businesses often trade between countries on their border as it makes it easier and cheaper for them to trade.
Migration is easier
Negatives for globalisation
Big businesses will monopolize leading smalling federal to slow down.
They see this as a “One size fits all” Problem
Effects of globalisation
offshoring - A business will move part of itself abroad so the charges are cheaper
outsourcing - Will pay another business to do things that they do for less money
Toxic Debt - Debt that has little chance of being repaid
Bonuses - A banker can only get 100% of his salary as a bonus
How are financial providers affected by the global economy
Can find more competition abroad
More exports happen
Example of reducing interest rates affecting countires
When the Uk dropped their interest rate to 0.5% the rest of the eu had their rates drop too
What does the world trade organization do
has over 160 members and tries to get trade between these country’s
Problems of a growing GDP
Will get so high that they cannot compete with the demand therefore raising prices
Requirements to join the euro
Meet certain levels of fiscal spending
non political banks
Low inflation and interest rates
established state currencies over a time period
What 5 countries had major problems during the 07/08 crisis
Ireland, - 3bn loan from the uk
greece, - had to get a deal from the IMF, had major unemployment
spain,portugal,italy - mass unemployment
What happens to finances if theirs a war
higher taxes
Government will try to sell more gilts
stocks dramatically fall
people cant manufacturer goods
How has climate change made prices different
More expensive to buy food from farms as the weather is hotter
How natural disasters affect people
- Coastal erosion can lead to dramatic drop in
house prices near cliff - Insurers spend a lot so they know where
flood spots are so they can charge premiums differently - Earthquakes can lead to country’s needing
lots of economic aid eg haiti 2010 - Volcano’s can cause dust with disturbs air
travel eg 2010 iceland eruption grounded
flights
What happens when the government bails out a bank
A sudden loss for investors
Stock market uncertainty
a fall in peoples confidence in banks
calls for more regulation
Implications for new countries entering the eu
The euro was strong which lead to countries not affording trade with them
A lot of new competition in the country
Migration makes it easier
What happened due to covid lockdown
Business closers - Businesses couldn’t afford to be open, sunak in april 2021 gave 18k to help them
Reduced spending - led to closers, debenhams closed losing 12k jobs
Big deficit in government spending
