General Globalisation Revision 4 Flashcards
(30 cards)
What is Free Market Liberalisation?
A governance model associated with policies by Ronald Reagan and Thatcher, believing that government interventions hinder long-term economic growth.
This model led to deregulation in the banking and finance sectors in the UK, making London a major financial centre.
What major action did Thatcher take regarding state-owned industries?
Thatcher privatised state-owned industries, allowing private companies to buy and run services.
This included important assets like railways and utilities.
What are the criticisms of privatisation?
Critics believe privatisation compromises the quality of services.
An example is the northern rail service, which has seen increasing strikes affecting commuters.
What incentives do governments provide to encourage business start-ups?
Governments provide grants, tax breaks, and infrastructure.
After Sunday trading began in the UK, companies like Disney established shops to capitalize on the opportunity.
What is Foreign Direct Investment (FDI)?
FDI involves TNCs increasing economic or industrial activity within a country.
This can include various forms like offshoring, mergers, and transfer pricing.
What is offshoring in the context of FDI?
Offshoring is when TNCs set up production facilities in developing countries with cheap labor.
An example is Bangladesh.
What are foreign mergers?
Foreign mergers occur when TNCs from different countries join to form one larger company.
This can happen in a hostile manner, potentially leading to local job loss.
What is transfer pricing?
Transfer pricing is when TNCs channel profits through subsidiaries in tax havens.
Ireland is an example of a tax haven used for this purpose.
What role does censorship play in limiting globalization?
Censorship restricts the flow of information and knowledge through state-controlled media.
It can limit knowledge of foreign cultures and ideas, undermining dictatorial governments.
How do national governments limit migration?
Governments implement border control and migration monitoring.
Recent trends show stricter migration controls due to rising right-wing views.
What is trade protectionism?
Trade protectionism involves subsidies, tariffs, and quotas to protect domestic industries.
An example is the Chinese steel dumping in 2016, which harmed global steel industries.
Fill in the blank: Trade protectionism helps a country to protect _______.
[domestic industries].
True or False: Free Market Liberalisation supports government intervention in markets.
False.
What are trade blocs?
Agreements between governments to reduce restrictions on the flow of capital and goods.
What is one benefit of trade blocs?
Larger potential market for businesses to sell to, leading to increased revenue.
How do trade blocs benefit businesses?
By increasing demand, leading to higher production and opportunities for suppliers.
What is a disadvantage of trade blocs?
Exclusion of outside countries, making it difficult for them to trade.
What can happen to foreign industries due to trade blocs?
They can be damaged by competition or lack of opportunities.
True or False: Trade blocs guarantee fair treatment among member countries.
False.
What are some controls and restrictions on imports and exports?
- Tariffs
- Non-tariff barriers (NTBs)
- Outright bans
What is the purpose of trade agreements?
To lower the costs of trade and benefit all parties involved.
What is NAFTA?
North American Free Trade Agreement that lowered tariffs between Canada, the USA, and Mexico.
What did NAFTA create?
The world’s largest free trade area of 450 million people.
What was the trade growth between NAFTA members from 1993 to 2013?
Trade quadrupled.
