4.1.1 Globalisation Flashcards
(19 cards)
What is globalisation?
The economic integration of different countries through growing freedom of movement across borders of goods/services, capital, and people
What is the overall impact of globalisation?
Globalisation results in the world economy becoming more connected due to increased interdependence
What factors have contributed to globalisation over the past 50 years?
Trade liberalisation
Transport
Communications Technology
Economic and Political Transitions
Transnational Companies
What are the 4 different types of trade?
Bilateral - Involving two parties
Consensus - A general agreement
Multilateral - Involving several parties
Orthodoxy - Authorised or accepted theory
What is trade liberalisation?
Trade liberalisation is the removal of restrictions on the free exchange of goods and services between nations
How does transport encourage globalisation?
The cost of transport has declined due to technological advancement
Firms can easily sell goods/services globally
What is a trans-national corporation?
Trans-national corporations are based or registered in one country but do business in other countries
How does communications technology encourage globalisation?
TNCs rely on communications technology. The improvement in quality and lowering costs has enabled operations on a global scale
How do economic and political transitions encourage globalisation?
Economic reforms of China through opening for FDI
Separation of Soviet Union created new markets
How do trans-national companies encourage globalisation?
The number and size of global companies have increased significantly. This has been encouraged by trade liberalisation and communications
What are the impacts of globalisation on individual countries
Increased productivity, Successful global firms = Raise Living Standards
Over-dependence
Interdependence
One economy can impact other economies
What is comparative advantage?
When a country produces a good/service for a lower opportunity cost than other countries
What are the impacts of globalisation on consumers?
Economies of scale - Lowered prices
Increased choice
What are the impacts of globalisation on governments?
Deindustrialisation = Structural Unemployment
Lowered tax revenue
What are the impacts of globalisation on producers?
Growing consumer markets
Global supply chains, Choice in suppliers = Lowered costs
Greater competition
What is offshoring?
The relocation of a business process from one country to another
What is bargaining power?
The capacity of one party to dominate another in a negotiation
What are the impacts of globalisation on workers?
Offshoring reduces workers bargaining power
Industries with comparative advantage = Higher wages, employment
Industries without comparative advantage = Falling wages and cyclical unemployment
What are the impacts of globalisation on the environment?
Industrialisation
Extraction of land
Transportation
Green technology
