4.1.1 - Globalisation

Question 1

Define Globalisation

Answer 1

The ever - increasing integration of world’s local, regional and national economies into a single international market

Question 2

Name FOUR Characteristics of Globalisation

Answer 2

. free movement of labour between countries (E.g. EU)

. free trade of goods and services across national boundaries. It’s easier for firms to sell abroad

. free movement of capital between countries (E.g. UK pension company invests in China )

. free interchange of technology and intellectual capital across boundaries (E.g. US firm can protect its patents in China on the same terms as it can in the US)

Question 3

Name FIVE Causes of Globalisation

Answer 3

1.) Trade in Goods
2.) Trade in Services
3.) Trade in Liberalisation
4.) Transnational Companies (TNCs)
5.) Communications and IT

Question 4

1.) Explain Trade in Goods

Answer 4

. For rich countries, goods get manufactured abroad in developing countries such as China or India.

. Trade is happening because developing countries acquire the capital equipment and knowledge to produce goods

. Developing countries have a cost advantage , cheap labour and efficient modes of transport

Question 5

2.) Explain Trade in Services

Answer 5

. Trade in services growing.

E.g. tourism takes in a large number of visitors abroad. Call centres for rich countries are being located in developing countries such as India

Question 6

3.) Explain Trade Liberalisation

Answer 6

. Trade liberalisation is the removal of barriers (e.g tariff and quotas) on the exchange of goods between nations

. Lower protectionist barriers have encouraged growth in world trade

Question 7

4.) Explain Transnational Companies (TNCs)

Answer 7

. A TNC is a company that operates in at least one country other than its home country. Usually factories of the company are located in poorer developing countries, whilst headquarters are located in the origin country, which is usually a HIC

. Large TNCs have economies of scale to make products cheap, whilst others have successful marketing techniques to create global brands

Question 8

5.) Explain Communications and IT

Answer 8

Developments in communications have shrunk time needed for economic agents to communicate.

. Industries such as software, people in offices far in different nations can easily communicate