4.1 Globalisation Flashcards
what is globalisation
the economic integration of countries
what is BRIC
Brazil Russia India China South africa
what is MINT
Mexico Indonesia Nigeria Turkey
Impact of economic growth on businesses
new markets->new customers-> more profits
lower labour and material costs-> reduced total costs
more expansion-> more investment (FDI)
Impact of economic growth on individuals
less unemployment
increased incomes->increased standard of livings
access to quality public services
4 indicators of growth
GDP per capita
Health
Literacy
Human Development Index
Specialisation
when a firm/country focuses on producing a specific g/s that they are good at
pros of specialisation
economies of scale-> lower unit costs as costs are spread over a larger output
->lower prices
->or higher profit margins
trade liberalisation
removal or reduction of trade barriers
pros and cons of trade liberalisation
P- increase market size-> larger output->economies of scale->lower prices/higher profit margins
reduces costs as imported raw mats and labour are cheaper
C-domestic firms may be drawn out
-vulnerable to dumping
Factors Contributing to Increased Globalisation (4)
lower cost of transport/communication eg containerisation
more MNCs with FDI
migration
growth of labour force
Pros and cons of tariffs (3,3)
P-protects infant industries so they can grow
- increase tax revenue
-reduces dumping
C-increases costs of imported raw materials->higher consumer prices
- reduces competition-> firms become inefficient
-reduces consumer choice
pros and cons of quotas (2,2)
P-extra demand-> less unemployment
-higher prices encourage new firms to start up
C-supply decreases so price increases
-less competition->more inefficient
Pros and cons of a trade bloc 3,2
p- access to more markets as free movement of goods
-external tariff walls- protects firms from competition outside bloc
-free movement of labour
c-inefficiency
-retaliation
