7.1.2 Flashcards
Explain why rise of technology and communications is a factor in globalisation
Digital communications through computers and mobile devices allow people to communicate with each other quickly and freely all over the world
This ready access to information and communication contributes to a shrinking world effect and is also known as time-space compression
Explain how rise of finance is a factor in globalisation
The global financial system facilitates quicker and easier flows of money, goods and services between countries
Financial deregulation has reduced barriers to capital flows, meanwhile, communications technology has made trade and financial transactions faster and more secure
What is a disadvantage of financial systems?
Globalisation also has disadvantages as a financial crisis or recession in one country can have significant impacts on financial systems around the world
The Global Financial Crisis of 2008 was caused by a fall in the US housing market, ultimately leading to Iceland’s banking system to collapse and a number of European countries to be unable to repay their government debts
Why rise of transport is a factor in globalisation?
There has been a reduction in the frictional effect of distance as greater distances can be covered in less time
Larger volumes of goods are transported between countries more quickly and easily due to the improvements in transport
Why containerization is a factor in globalisation
Container shipping – vital to the global economy since the 1950s
Containerisation has been one of the most significant changes which has increased the rate of globalisation - today, the largest container ships carry 24,000 containers
Why rise of security is a factor in globalisation
Sometimes groups of countries work together to increase security by forming political and military alliances
For example, the North Atlantic Treaty Organisation or NATO.
Today, NATO aims to guarantee the freedom and security of all 30 member nations by building trust between countries to maintain global peace and stability
What are the disadvantages of globalisation for global security
Globalisation can also increase threats to security by giving more opportunities for crimes such as counterfeiting, fraud, smuggling and even terrorism
Why trade agreements and blocs are factors in globalisation?
Trade blocs remove or reduce barriers to trade between them such as tariffs and quotas
This facilitates free trade and results in larger volumes of trade between member nations
Trade agreements encourage cooperation between countries and promote peace and stability
Outline two disadvantages of trade agreements
However, there are often external barriers or restrictions which may reduce trade with countries that are not part of the trade bloc
There may also be a backlash against loss of sovereighty which could result in members leaving trade blocs e.g. Brexit
Explain how trade agreements are a factor in globalisation (4 marks)
Trade agreements are formed by countries joining together to form a trade bloc that encourages trade between themselves and promotes economic co-operation (1), for example NAFTA (1d)
Trade agreements are a factor in globalisation by encouraging trade across a number of countries. This may lead to increased investment from other countries (1) for example Audi has built a factory in Mexico in order to gain access to other NAFTA countries (1).
Trade agreements can lead to people moving more freely to seek work in the trading bloc (1). This encourages globalisation by increasing links between countries as often supporting goods and services will follow (1d).
