4.1 Flashcards
Globalisation
The process of greater integration and inter-connectedness between countries
The International Monetary Fund (IMF)
The process through which an increasingly free flow of ideas, people, goods, services and capital leads to the integration of economies and societies
Features and characteristics of globalisation
- Growth of international trade
- Trade liberalisation
- Enhanced mobility of labour & Capital
- Increased cultural exchange
- Increased international capitalism
- Increased outsourcing
- Falling transport costs
- Growth of MNCs
How have trade agreements contributed to globalisation
The WTO ( World Trade Organisation) has assisted in the removal / reduction of trade barriers increasing trade agreements and globalisation across the world
How have Reduced tariffs and protectionism contributed to globalisation
A large number of countries with significant global economic influences have lowered protectionist measures boosting trade and globalisation
How have Expansion of global trading blocs contributed to globalisation
Trading blocs such as the EU and NAFTA reduce trade barriers promoting trade and integration / globalisation
How have Improved technology contributed to globalisation
Advances in technology improve communication, lowered labour costs and allow businesses to access global markets through new transports.
How have globalised financial systems contributed to globalisation
Rules and regulations on moving capital have been relaxed making it quicker and cheaper across the world. Global trade is quicker, cheaper and easier.
How have Greater labour mobility contributed to globalisation
Workers are more willing and able to move across national borders for employment
How have Improvements in transportation contributed to globalisation
The movement of people, goods and services across the world cheaper and quicker
How have Growth of MNCs contributed to globalisation
MNCs have taken advantage of low trade barriers and entered new markets and boost sales
How have greater openness of former closed economies contributed to globalisation
Previously closed economies have become increasing integrated boosting the volume of sales globally and introducing new goods / services tot the world.
Positive impacts of globalisation
- Improved allocation of resources: reduces economic problem
- Free trade: more opportunities for exports
- Inward investment: firms can invest out of their country of origin
- Specialisation : greater choices
- Greater competition increases efficiency globally
Negative impacts of globalisation
- Inequality : MEDCs will benefit more widening the inequality gap
- Environmental impacts
- Structural unemployment: businesses move to countries with cheaper labour
- Movement of labour: best talents will move to the best countries
- Damage to traditional cultures
Negative impacts of MNCs
- Negative impact on smaller firms
- Environmental impacts
- Limit taxation / return it to home country
- Profit motive increases prices and reduces wages
Benefits of MNCs
Economies of scale reduce prices
Creates employment
Develop infrastructure
Can drive expenditure and investment into countries they enter
