Chapter 13- globalisation

Question 1

globalisation

Answer 1

arises from growing world markets and increasing international trade. It’s often associated with strong economic growth. It may entail increasing interdependence as individual businesses make profits in foreign markets and look abroad for finance for investment.

Question 2

open economies

Answer 2

export a relatively high proportion of total production and import a high proportion of goods they use. Open economies are usually the smallest.

Question 3

structural change

Answer 3

involves re allocation of resources

Question 4

Foreign Direct Investment (FDI)

Answer 4

Occurs when businesses set up production or distribution facilities in other countries. Increasingly, FDI is flowing into developing countries as businesses seek locations with lower wage rates.

Question 5

outsourcing

Answer 5

means shifting the production process to other businesses in order to reduce input costs.

Question 6

trade liberalisation

Answer 6

refers to the process of limiting and reducing barriers to trade so that the economies involved move closer to free trade

Question 7

multinational corporations

Answer 7

are businesses with active interests in more than one economy. They are also known as transnational corporations.

Question 8

summary of globalization

Answer 8

increased trade
migration of people
movement of capital