4.1.1 Growing economies

Question 1

Globalisation

Answer 1

Process of making the world economy more inter-dependent.

Question 2

Emerging economy

Answer 2

An economy in the process of rapid growth and industrialisation.

Question 3

Features of emerging economies

Answer 3

• Rapid industrialisation.
• Have potential to become developed economies.
• Foster longer-term economic growth than most developed economies.
• Many inhabitants still in poverty, though economic growth is taking many out of poverty.

Question 4

Opportunities posed by emerging markets on UK businesses

Answer 4

+ Growing number of educated consumers = growing consumer spending.
+ Source of high skilled but low cost labour (outsourcing/offshoring).
+ Potential for joint ventures and acquisitions.
+ Demand for infrastructure and other products and services from developed economies.

Question 5

Threats posed by emerging markets on UK businesses

Answer 5

• Increased competition - emerging markets can produce at a lower cost.
• Undervalued currencies make their exports cheaper.
• Inadequate protection of brand and other intellectual property.

Question 6

Effects of growing economies on employment patterns

Answer 6

• Unemployment rates fall.
• Move from agriculture to modern economic activities: income rises.
• Changer in employment from primary sector to secondary/tertiary.

Question 7

Effects of growing economies on trade opportunities for businesses

Answer 7

• Businesses set up production in emerging economies.
• Increased demand in emerging economies - higher exports into them.
• Increased foreign direct investment.

Question 8

Indicators of growth

Answer 8

1) GDP - A measure of the size of an economy. The sum of everything a country produces.
2) Literacy - Percentage of the population of a given age group that can read and write.
3) Healthcare
4) HDI - Combines life expectancy, education and average income of population.