Chapter 1 - Globalisation

Question 1

Globalisation

Answer 1

Ever increasing integration of the world’s local, regional and national economies into 1 single, international market

Question 2

Characteristics of globalisation

Answer 2

• Increase in trade as a proportion of GDP
• Increase of TNCs and FDI
• Increase in migration

Question 3

FDI

Answer 3

Flow of capital from one country to another
Advantages
- Provides LEDCs with funds
- Economic growth
- Job creation
- Development of infrastructure
Disadvantages
- MN get controlling rights
- Bypass environmental laws
- Poor working conditions
- Economic dependence

Question 4

Causes of globalisation

Answer 4

Decrease transport costs
Decrease communication costs
Lowering trade barriers
TN and MN companies
Trading blocs

Question 5

Benefits of globalisation

Answer 5

Increase in economic growth
- EVAL: interdependence - a recession in a country will lead to a recession in an area

EOS

Decreased prices which increases international competitiveness - as domestic producers face external competition

More choice

Higher standards of living - jobs are created

Movements of labour
- Deal with labour shortages
- Diminish the rise in unemployment

Question 6

Costs to globalisation

Answer 6

Displaced workers - brain drain
Exploitation
Environmental damage
Loss of tax revenue
Increased income inequality