4.1 International Economics

Question 1

Globalisation

Answer 1

Refers to the growing interdependence of countries and the rapid rare of change it brings about.

The geographic dispersion of industrial and service authority

Question 2

Characteristics of globalisation

Answer 2

-increase in trade as a proportion of GDP
-increased movements of financial capital and people between countries
-increased international specialisation and division of labour
-growing importance of global or transnational companies (TNCs)
- there is movement towards free trade of goods and services, free movement of labour and free interchange of tech and intellectual capital.

Question 3

Factors contributing to globalisation

Answer 3

-improvements in transport infrastructure (production to be separated)
-improvements in IT and communication
-trade liberalisation and reduced protectionism
-international financial markets
-TNCs and FDI
-Increased free trade
-reduced barriers to trade (WTO)

Question 4

Globalisation and external economic shocks

Answer 4

-global financial crisis
-china slowdown
-extreme weather events
-geo-political uncertainty
-global pandemics

Question 5

Impacts of globalisation on consumers

Answer 5

-consumers have more choice since there are a wider range of goods available from all around the world, not just those produced in the UK
-it can lead to lower prices as firms take advantage of comparative advantage and produce in countries with lower costs
It is leading to a rise in prices since incomes are rising and so there is demand for goods and services
-many consumers worry about the loss of culture