Globalisation

Question 1

Globalisation Definition

Answer 1

The growing interconnectedness of the world’s economies

Question 2

Drivers of Globalisation

Answer 2

Improved Transport Networks
Improvement in Communication Technology
Reduction of Trade Barriers
Deregulation by Global Governments
Multinational Companies

Question 3

Improved Transport Networks

Answer 3

Improvements in shipping (containerisation), aerial and rail technology, now goods can be transported much faster and more cheaply
- Greater incentives to split up the production line and conduct sales abroad

Question 4

Improved Communication Technology

Answer 4

The internet and mobile phones means that corporations can run their businesses from abroad much more efficiently

Question 5

Reduction of Trade Barriers

Answer 5

Tariffs and import quotas have been reduced by trading blocs like the EU

Question 6

Deregulation by Global Governments

Answer 6

Governments can try to incentivise foreign investment by lowering tariffs or creating Special Economic Zones (SEZs) where it is easier for businesses to operate

Question 7

Multinational Companies

Answer 7

A company which operates in multiple countries by separating their production line and selling to multiple different markets

Question 8

Impacts on Developed Workers

Answer 8

• Workers lose their jobs
• Unless they can retrain it will be difficult to get new ones
• Lower disposable income and SoL

Question 9

Impact on Developing Workers

Answer 9

• Workers gain better jobs with higher wages
• Some firms offer to pay for their workers education or give benefits to their families

Question 10

Impact on Developed Firms

Answer 10

• Lower production costs meaning more profit
• Gains access to a larger market so more revenue so more PROFIT
• Factories closing in developed a could potentially mean less money in the circular flow of income so less revenue

Question 11

Impact on Developing Firms

Answer 11

• They could be outcompeted in the local labour market and therefore struggle to find new labour
• Local multiplier effect

Question 12

Impact on Developed Governments

Answer 12

• Loss of tax revenue
• Lower GDP
• Higher unemployment needs more money spent on unemployment benefits

Question 13

Impact on Developing Governments

Answer 13

• More tax revenue
• Higher GDP

Question 14

Impact on Developed Consumers

Answer 14

• Cheaper Goods
• More choice

Question 15

Impact on Developing Consumers

Answer 15

• Come back to this later