GLOBALISATION

Question 1

What is Globalisation?

Answer 1

The increased integration and interconnectedness of economies around the world

Question 2

CAUSES of Globalisation

Answer 2

• Improvements in Communication
• Improvements in Transport; ‘Containerisation’
• Increased Free Trade through Trade Blocks
• Closer Political Ties
• Increased significance of MNCs
• Abolition of Capital Controls to allow freer money flow across countries

Question 3

CHARACTERISTICS of Globalisation

Answer 3

• More trade between countries
• More labour migration between countries
• Increased Capital Transfers between countries through FDI & Portfolio Investment
• Increased regional specialisation (i.e division of labour)
• Greater use of Outsourcing/offshoring - Using business around the world to get resources

Question 4

Advantages of Globalisation on More Developed Countries

Answer 4

• Increased ability to outsource production to low-cost countries
• Potential for higher sales by targeting fast growing economies
• Ability to recruit globally; helps for domestic labour shortages

Question 5

Disadvantages of Globalisation on More Developed Countries

Answer 5

• Increased competition from low-producers abroad (Eval. - Could incentivise increased efficiency; good for firms)
• Possible ‘brain drain’

Question 6

Consequences of Globalisation on Less Developed Countries

Answer 6

• More global competition may see local firms struggle
• Job Creation (Eval. - Potential Exploitation of Workers)
• ‘Glocalisation’ - Global firms adapting products to fit local tastes
• Having to adopt free market macro policies to attract FDI
• Possible ‘Brain Drain’