3.2.4

Question 1

What is globalisation?

Answer 1

The worldwide movement toward economic, financial, trade and communications integration.

Question 2

What is an LEDC?

Answer 2

A less economically developed country that confronts severe structural impediments to sustainable development.

Question 3

What is a MEDC?

Answer 3

A more economically developed country that has a developed economy and advanced technological infrastructure relative to other less industrialised nations.

Question 4

What is a multinational corporation?

Answer 4

Where a firm has operations in at least one other country other than its home country.

Question 5

Why has globalisation happened?

Answer 5

Technology, infrastructure, deregulation and MNCs.

Question 6

How can globalisation be encouraged?

Answer 6

Open borders, little protectionism and easy planning permission.

Question 7

What is FDI?

Answer 7

When a company makes an investment in a foreign country.

Question 8

How can governments get businesses to invest in the country?

Answer 8

Low interest, government grants, relaxing laws, investing in education and lowering taxes.

Question 9

What is development aid?

Answer 9

Developed countries giving aid to less developed countries.

Question 10

What are 3 examples of development aid?

Answer 10

Grants, loans and tied aid.

Question 11

What are 3 advantages to MEDCs of globalisation?

Answer 11

Cheaper labour and expertise overseas, source of raw materials, less conflict.

Question 12

What are 3 advantages to LEDC’s of globalisation?

Answer 12

FDI, allowing them to expand industry, gives them access to different markets and increase in tax revenue with more employed.

Question 13

What is overpopulation?

Answer 13

When there are not enough resources to support the population without a decline in living standards.

Question 14

What is sustainability?

Answer 14

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Question 15

What is tax avoidance?

Answer 15

The practice of paying less tax in legal ways.

Question 16

What is tax evasion?

Answer 16

The practice of paying tax in illegal ways.

Question 17

What is the IMF?

Answer 17

International monetary fund, acts as help for poorer countries offering expertise, loans and grants.

Question 18

What is tied aid?

Answer 18

Money given in return for something e.g. USA funding Ukraine but making them buy US equipment.

Question 19

What is global corporation tax?

Answer 19

It is at least 15%.

Question 20

What are trading blocs?

Answer 20

A group of countries in the same area that join together and make a ‘free trade area’ free of tariffs, quotas or any regulation.

Question 21

What is a free trade area?

Answer 21

Where 2 or more countries abolish trade barriers between the countries, maintaining its own tariffs against non member countries however.

Question 22

What is an economic union?

Answer 22

Where 2 or more countries eliminate all barriers to trade. Common tax system and the same currency.

Question 23

What is the EU single market?

Answer 23

Refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services.

Question 24

What is a retaliation?

Answer 24

Actions countries take as a result of another countries actions.

Question 25

What are advantages of being in a trade bloc?

Answer 25

Cheaper goods from free trade, more FDI, more consumer choice and economies of scale

Question 26

What are disadvantages of being in a trade bloc?

Answer 26

Less global free trade, financial costs for governments, overreliance of trading within the bloc and monopolising markets as firms can merge.

Question 27

What are some criticisms of the WTO?

Answer 27

Allowing of exploitation of workers in the developing countries, depleting of resources in LEDCs, developed world pushing down prices in LEDCs and the environment usually suffers.

Question 28

What is internal trade?

Answer 28

Trade within a country.

Question 29

What are commodities?

Answer 29

Raw materials.

Question 30

What is trade liberisation?

Answer 30

Moving towards free trade by removing the barriers.

Question 31

What are infant industries?

Answer 31

New industries, yet to establish themselves.

Question 32

What is interdependence?

Answer 32

The reliance of countries on each other resulting from specialisation and free trade.

Question 33

What is free trade?

Answer 33

International trade left to its natural course without tariffs, quotas, or other restrictions.

Question 34

What is an embargo?

Answer 34

Orders to stop trading with a other country.

Question 35

What are trade barriers?

Answer 35

Measures designed to restrict imports.

Question 36

What are reasons for protectionism?

Answer 36

Protecting jobs, small businesses, the environment, improving the current balance, raising domestic demand.

Question 37

What are problems with protectionism?

Answer 37

Losing benefits of free trade so consumers pay more for imports, less competition and trade wars.

Question 38

What are methods of protectionsim?

Answer 38

Tariffs, quotas, subsidies and administrative barriers.

Question 39

What are tariffs?

Answer 39

Tax on imports so people choose domestic goods.

Question 40

What are quotas?

Answer 40

Limits on imports to protect domestic supply. They calculate total demand minus what domestic producers can produce and the difference is the quota.

Question 41

What are artificial barriers?

Answer 41

Non-financial methods used to prevent firms from being able to enter the domestic market.

Question 42

What is appreciation?

Answer 42

When the value of the currency rises in value to another.

Question 43

What is depreciation?

Answer 43

When the value of the currency falls to another.

Question 44

What are exchange rates?

Answer 44

The value of one currency for the purpose of conversion to another.

Question 45

What is a fixed exchange rate?

Answer 45

When the value of a currency is pegged to another major currency such as the UK dollar.

Question 46

What is the foreign exchange market?

Answer 46

A market where foreign currencies can be bought and sold, FOREX is the largest private firm that offer this.

Question 47

What is free floating?

Answer 47

Where the price of a currency is determined by market forces.

Question 48

What are reserve assets?

Answer 48

They include currency, commodities or other financial capital held by monetary authorities such as central banks to finance trade imbalances.

Question 49

What are 2 factors that impact exchange rates?

Answer 49

Interest rates, where if they rise investors will put money into banks, so higher rates lead to strengthening of a currency. Political stability where investors like safety so it leads to stronger currencies.

Question 50

What are the impact of your currency weakening?

Answer 50

Higher prices, oppurtunity to export more and tourism increases.