4) Globalisation

Question 1

What is globalisation??

Answer 1

A process by which the world’s economies have become increasingly integrated and inter-dependent, specifically markets in the global economy eg financial markets and commodity markets

Question 2

5 Causes of globalisation

Answer 2

1) improved transport making global transport easier eg rapid growth in air travel means greater movement of goods and people
2) Improved technology- better communication and information sharing also means labour across the world easier to source
3) containerisation (use of steel containers) reduces costs of inter-modal transports as its cheaper and more efficient
4) Growth of multinational companies with global presence in many markets
5) Reduced tariff barrieres supported by WTO

Question 3

5 Consequences of globalisation

Answer 3

1) Greater trade in goods and services across economies, both intra-regional (EU) and inter-regional eg US and China
2) Greater transfer of FDI and financial capital (more freedom and incentive to move money between economies to maximise returns)
3) Greater labour migration as people leave to avoid famine/persecution to get better wages
4) Development of global brands makes economies and countries increasingly similar
5) greater specialisation via outsourcing of work to other economies, and off shoring

Question 4

How globalisation positively effects developed countries

Answer 4

• New markets have opens for exports
• Large pools of immigrant labour available
• Economies of many developed countries increasingly driven by financial markets that are favoured by developing countries (inflow of money)

Question 5

How globalisation negatively affects developed countries

Answer 5

• Disappearance of large parts of primary and secondary sectors
• Increase immigration led to socio-political tensions which negatively effect growth
• Contributes to increased inequality

Question 6

How globalisation benefits emerging economies

Answer 6

• helps them to grow as MNC’s expand
• Improved standard of living due to FDI and availability of global brands
• More consumer choice
• More job opportunities due to MNCS investing in their country

Question 7

How globalisation negatively affects emerging countries

Answer 7

• Globalisation/ MNCS obliterate domestic business
• ENhances inequality
• Free movement of labour leads to brain drain. Best labour move to countries with better pay and opportunities
• Inward FDI to emerging countries has symmetrical effect on finance flows ie nike shoes made in India but profits end up back in USA.