4.1) International Economics

Question 1

What are developed, developing and emerging countries?

Answer 1

• developed: richer, industrialised countries like UK and Japan - high GDP per capita figures
• developing: largely reliant on manufacturing, agriculture and other labour-intensive industries. They will usually have low GDP per capita figures and lower standards of living
• emerging: not yet developed but growing more quickly than some developing countries e.g. China

Question 2

What is globalisation?

Answer 2

The increasing integration of economies internationally
- free movement of capital and labour across international boundaries
- free trade in goods and services between different countries
- availability of technology and intellectual capital

Question 3

How does globalisation involve political and cultural factors?

Answer 3

• UN - leads to a convergence of political decisions and therefore cooperation
• cultural globalisation like the spread of trends worldwide etc. like K-pop

Question 4

How does globalisation link developed and developing countries?

Answer 4

The labour used to produce products is divided between more countries or moves from developed to less developed countries
- developing countries have obtained the skills and tech needed to manufacture goods - these are often sold in developed countries
- works especially well because the cost of labour is relatively cheaper there, which has encouraged foreign companies to start producing goods overseas e.g. India provides software development for many European countries

Question 5

How does the growth of multinational corporations (MNCs or TNCs) promote globalisation?

Answer 5

MNCs are firms that operate in at least one other country aside their country of origin e.g. KFC and Nissan. They may decide to invest in a country to divide their operations and locate a country either the lowest costs e.g. by offshoring and outsourcing.

The decision to invest in a country, depends on:
- availability of cheap labour and raw materials
- good transport links
- access to different markets
- pro-foreign investment government policy

Question 6

What are the causes of globalisation?

Answer 6

• TRADE LIBERALISATION - reduction or removal of tariffs and other trade barriers and more negotiated trade agreements => trading blocs like EU
• increased GLOBAL PRODUCT STANDARDS - so consumers have more confidence in imported goods
• CONTAINERISATION - reduced transport times and cost = cheaper to import and export
• improvements in COMMUNICATIONS - easier and cheaper
• TNCs wishing to increase profit and exploit EOS by expanding => increase in FDI ++ increase in significance and influence
• new markets to trade and invest in e.g. China opening its economy and joining WTO in 2001
• more investment by sovereign states e.g. Norway oil revenues
• international specialisation which encourages international trade

Question 7

What are the benefits of globalisation to national economies?

Question 8

What are the drawbacks of globalisation to national economies?

Question 9

What are the advantages and disadvantages of TNCs operating?

Question 10

What is the impact of globalisation on the environment?

Question 11

What are the consequences of globalisation for developing and developed coun