4.1.1 Flashcards
What is Globalisation?
Increased integration of different economies around the world.
What are 4 characteristics of Globalisation?
Increased international movement of labour
Increased movement of financial capital
Increased Specialisation
Increased International trade (goods and services)
What is ‘Increased international movement of labour’?
Where people move from their birth country to work in a different country.
What is ‘Increased movement of financial capital’?
Money used for investment is moved globally.
What is ‘Increased Specialisation’?
Production process is focused on limited goods but made efficiently. ( oil in saudi makes up 50% of gdp)
4 Causes of Globalisation?
Improvement in transport
Improvement in technology
Containerisation
Trade Liberation
How has ‘Improvement in transport’ caused Globalisation?
Availability and speed of airplane flights have improved movement labour and speed of transport
How has ‘Containerisation’ caused Globalisation?
Using huge shipping containers to ship more products at once and quicker. This is economies of scale, therefore cheaper cost of production.
How has ‘Improvement in technology’ caused Globalisation?
Improves ability to promote companies globally and ability to communicate.
How has ‘Trade Liberation’ caused Globalisation?
The reduction and removal of trade barriers. Lowers cost and increases demand.
What is a TNC?
Transnational corporations have production facilities in two or more countries.
Impacts of Globalisation on Individual Countries
Better specialisation, Increase in GDP, Increase employment rate, Living standards
Overdependence (saudis 50% GDP on Oil), with political problems can cause huge problems if price falls
Impacts of Globalisation on Governments
Tax revenue increase due to tariffs.
Tax avoidance due to transnational corporations operating in tax havens
Impacts of Globalisation on Producers
Cost of production will fall due to cheaper labour costs (10%-25% of Uk salary in China)
Huge increases in barriers of entry due to economies of scale.
Impacts of Globalisation on Consumers
Wider choice and Cheaper prices (Due to cheaper production costs)
Inflation
