4.1 International Economics (Globalisation)

Question 1

What is globalisation?

Answer 1

The growing interdependence of the worlds economies, cultures and populations

Question 2

What are 4 causes of globalisation?

Answer 2

- Technological change: e.g internet, video conferencing
- Cheaper international transport: deregulation of air travel, containerisation
- Liberalism: reduced protectionism
- Political globalisation

Question 3

How has Liberalism led to globalisation?

Answer 3

It has led to a reduction/relaxation of tariffs and barriers on international trade, allowing the economy to operate freely

Question 4

How has containerisation led to globalisation?

Answer 4

The standardisation of shipping containers/infrastructure, makes global shipping quicker and cheaper (expansion of global supply chains)

Question 5

What are 4 characteristics of globalisation?

Answer 5

• Expansion of financial capital flows across international borders
• Global supply chains and new trade routes
• High levels of international migration
• More FDI and global brands

Question 6

Name 2 political organisations

Answer 6

• World trade organisation (WTO)
• International monetary fund (IMF)

Question 7

What are 3 benefits of political globalisation?

Answer 7

• Promote free trade
• Promote political ties/dialogue
• Prevent conflict

Question 8

What are 4 advantages of globalisation?

Answer 8

- Cheaper goods/services for consumers: increased choice of goods and services
- More competition in markets: increased foreign brands
- Transfer of ideas stimulate innovation: cultural practices on work shared within global companies
- Gains from Improved labour moblility: labour gaps can be filled, more foreign workers

Question 9

What are 3 disadvantages of globalisation?

Answer 9

- External costs from unsustainable growth e.g environmental degradation
- Brain drain: educated individuals emigrate to developed countries, loss of skills for source country
- Trade imbalances: a surplus or deficit in trade accounts e.g imports exceed exports

Question 10

Name 2 factors that impact globalisation

Answer 10

• Education and transferable skills
• Legislation e.g protectionism (government policies restricting trade)

Question 11

What is the impact of globalisation on workers?

Answer 11

• The wages for high skilled workers will increase, as there is more demand for their work (increases inequality)
• Increased migration may lead to lower wages

Question 12

What is the impact of globalisation on the environment?

Answer 12

• The world can work together to tackle climate change, sharing ideas and technology
• increase in world production has led to increased demand for raw materials

Question 13

What is the impact of globalisation on producers?

Answer 13

• Can source and sell products to and from more countries, spreading risk
• Able to employ low skilled workers much cheaper in developing countries (exploit comparative advantage)

Question 14

What is an impact of globalisation on government?

Answer 14

• Government can receive higher taxes, since TNCs and their workers pay tax