Globalisation - 3.2

Question 1

Bretton Woods - International Monetary Fund (IMF) - members

Answer 1

There are 185 members but they don’t have equal voting value. Voting rights are proportional to the amount of money invested into the fund

• USA has 17% (largest economy)
• EU has 25.7%
• Western developed countries have 54.4%
• BRICs have 9.7%

Question 2

Bretton Woods - International Monetary Fund (IMF) - rules

Answer 2

Countries receiving this help must agree to run free market economies that are open to outside investment (TNCs work in these easily)
The rules and regulations can be controversial especially the strict financial conditions forced on borrowing governments, who may be required to cut back on health care, education, sanitisation and housing programmes

Question 3

Bretton Woods - The World Trade Organisation (WTO) - intention

Answer 3

Intends to supervise and liberalise (removing gov. influence) international trade

Question 4

Bretton Woods - The World Trade Organisation (WTO) - what do they ask countries to do

Answer 4

Remove tariffs/taxes on foreign imports and subsides to domestic products so that trade is free and without barriers

Question 5

Bretton Woods - The World Trade Organisation (WTO) - receiving international loans

Answer 5

They must agree to WTO’s rules

Question 6

Bretton Woods - The World Trade Organisation (WTO) - international trade

Answer 6

International trade exposes home grown products to foreign competition. Foreign goods are cheaper and of higher quality, so local firms will go out of business thus reducing local employment.
This happened in Ghana with Italian tomatoes and in India with American rice

Question 7

Bretton Woods - The World Bank - current aim

Answer 7

Aiming to achieve the Millennium Development Goals in an attempt to end poverty and implement sustainable development

Question 8

Bretton Woods - The World Trade Organisation (WTO) - loan to the Philippines

Answer 8

$470 million loan granted for a poverty reduction programme

Question 9

Bretton Woods - The World Trade Organisation (WTO) - 2014

Answer 9

distributed $65 billion in loans and grants

Question 10

Bretton Woods - The World Trade Organisation (WTO) - similar to IMF

Answer 10

They have conditions on their loans and grants and also has a proportional voting system based on the amount of money invested

Question 11

Bretton Woods - How are the IMF, WTO and World Bank similar?

Answer 11

They are run by the USA and Western world thus benefiting them more whilst appearing to help others

Question 12

The EU and ASEAN - free market liberalisation

Answer 12

neoliberalism (1) gov intervention in market impedes economic growth (2) wealth increases and trickle dow will occur from the richest to poorest

Question 13

The EU and ASEAN - privatisation

Answer 13

overseas companies run the UK such as the French Keolis owns a large proportion of South England rail network. Since the global financial crisis, the UK approached Chinese and Middle Eastern sovereign wealth funds to help fund new infrastructure projects

Question 14

The EU and ASEAN - encouraging business start ups

Answer 14

methods range form law business taxes to changing the law allowing both local and foreign owned finesses making more profit.
Sunday trading, introduced in 1994, became more attractive market for foreign retailers - Burger King to Disney Store

Question 15

China and the 1978 open door policy

Answer 15

• FDI from China and its TNCs is predicted to total $1.25 trillion from 2015-2015
• China agreed to export ‘rare earths’ minerals to other countries in line with WTO
• Foreign TNCs are now allowed to invest some sectors of China’s domestic markets, including its rail freight and chemical industries

Question 16

How could global flows be seen as threats?

Answer 16

• imports of raw materials and commodities can threaten nations own industries
• migrants can bring cultural change and religious diversity which isn’t welcomed by everyone
• information can provide citizens with knowledge that their government finds threatening

Question 17

Globalisation isn’t an automatic outcome

Answer 17

• not everywhere has the population density or market potential to attract international investors
• economic differences can also result in places becoming divided

Question 18

FDI

Answer 18

The Bretton Woods institutions have created a global legal and economic framework that’s suited to free trade and FDI

Question 19

Governments and trade BLOCs

Answer 19

• national governments became new players in globalisation when they adopt policies that allow TNCs to grow in size and influence

Question 20

Trade BLOC

Answer 20

voluntary international organisations that exist for trading purposes, bringing greater economic strength to the nations that join
Eg. the EU, NAFTA and the South East Asian Nations

Question 21

How does free trade increase globalisation?

Answer 21

Government takes away barriers that make trade more difficult and costly
= as costs are reduced, TNCs will see a profit and want to invest in nations
= TNCs will bring new ideas, products, cultures etc to a nation
= the TNC will also generate wealth
= this wealth and development will increase standard of life and demand for foreign products
= as an economy has more TNCs they become interconnected and interdependent on each other

Question 22

Tariff

Answer 22

a tax imposed on imports

Question 23

Subsidy

Answer 23

financial assistance to a business by a gov. to make it competitive or prevent collapse

Question 24

Quota

Answer 24

limit on the quality of a good a country can allow into a country

Question 25

Protectionism

Answer 25

policies to protect businesses and workers in a country by restricting/regulating trade with foreign nations

Question 26

Free market economy

Answer 26

market economy based on supply and demand with little or no gov. control

Question 27

Free trade

Answer 27

gov. policy where gov don’t interfere with imports/exports by applying tariffs/quotas etc

Question 28

Neoliberalism

Answer 28

Political philosophy of free markers, trade, privatisation and increasing the role of business in society (while decreasing gov influence). It’s thought that by making trade easier, there’ll be more, meaning more wealth and reduction of poverty