Globalization

Question 1

What is globalisation, its causes, and benefits?

Answer 1

Globalisation:
The process where national economies become more integrated and interdependent.

Question 2

causes,

Answer 2

Trade liberalisation: more free trade and lower trade barriers

Growth of trading blocs: more free trade areas forming

Growth of Multinational Corporations (MNCs): companies operating globally

Technological advancements: easier transport and communication

Mobility of labor & capital: capital and workers move more freely across borders

Question 3

benefits?

Answer 3

Lower prices and increased competition → benefits consumers and businesses (more choice, better products, lower costs)

Trade boosts → more tax revenue, economic growth, and development

Greater employment → markets grow, firms expand, higher living standards

Question 4

Benefits of Large Economies of Scale (EOS) & Economic Integration

Answer 4

Firms produce more, lowering costs and encouraging innovation and higher profits.

Free movement of labor and capital within regions (e.g., EU) allows workers to move freely and attract foreign firms to invest.

Question 5

Cons of Large EOS & Integration

Answer 5

Growing inequality: wealth and tax revenues concentrate, while poorer populations remain in poverty.

Structural unemployment rises as competition increases.

Environmental costs: increased pollution, depletion, and degradation of natural resources.

Trade imbalances: rapid export growth in some areas can lead to current account imbalances and protectionism.

Greater risk of external shocks spreading globally (e.g., financial crises).

Loss of cultural diversity: multinational corporations dominate, reducing unique local customs and businesses.