4.1.1: Globalisation

Question 1

What is globalisation?

Answer 1

• The growing interdependence of countries around the world
• The increasing integration of the world’s local, regional and national economies into a single international market.

Question 2

What is international trade?

Answer 2

• The flow of goods and services between countries, eg importing and exporting

Question 3

What are the contributing factors to globalisation?

Answer 3

• Improvements in transport infrastructure and operations
• Improvements in IT and communication
• Trade liberalisation and reduced protectionism
• International Financial Markets
• TNCs(large companies operating around the world)

Question 4

How does improvement in transport infrastructure and operations contribute to globalisation?

Answer 4

• Can facilitate trade expansion
• Can attract direct foreign investment
• Speeds up industrialisation process
• Can facilitate regional integration

Question 5

Examples of improvement in transport infrastructure affect globalisation

Answer 5

• 1970s: Through containerisation (bulk ocean shipping)
• Produce in other countries e.g China and transport in other large amounts

Question 6

How do improvements to IT and communication contribute to globalisation?

Answer 6

• allows easier connection across the globe
• during times of adversity eg COVID 19, helps companies still be able to operate at a certain level (Zoom)

Question 7

What is trade liberalisation?

Answer 7

• Refers to reducing barriers to trade so that countries become closer to free trade

Question 8

How does trade liberalisation contribute to globalisation?

Answer 8

• makes it cheaper and more feasible to trade

Question 9

When did trade liberalisation start occurring?

Answer 9

• Since 1945
• The breakdown of the soviet bloc and the opening of China has shown a whole near area to expand to in terms of business

Question 10

How do international financial markets contribute to globalisation?

Answer 10

• They have provided the ability to raise money and move money around the world, which is necessary for international trade

Question 11

What are TNCs?

Answer 11

• Transactional Corporation
• They are multi- business companies that operate in more than one country

Question 12

What are the two main ways to regulate trade?

Answer 12

• Free trade: encourages trade between countries
• Protectionist policies: restricts trade between countries

Question 13

How tax incentives affect globalisation?

Answer 13

• Tax incentives to bring foreign direct investment (investment from business abroad)

Question 14

What are the impacts of globalisation on consumers?

Answer 14

• Consumers have more choice, as they have a wider range of goods
• It can lead to lower prices as firms take advantage of comparative advantage and produce countries with lower costs, eg low labour costs
• In other cases, it is a leading to a rise in prices since incomes are rising and so there are higher demands for goods and services.
• Many consumers may lose of culture

Question 15

What are the impacts of globalisation