4.1.3 - Factors Contributing To Increased Globalisation

Question 1

Def globalisation

Answer 1

Is the trend towards closer ties between economies and businesses within the global economy

Question 2

Def isolationism

Answer 2

Refers to a nation whose trade policies are designed to put the interest of domestic businesses first by imposing trade barriers to hamper imports

Question 3

8 factors contributing to increased globalisation

Answer 3

• trade liberalisation
• political change
• reduced cost of transport and communication
• increased significance of transnational corporations
• increase investment flow (FDI)
• migration
• growth of the global labour force
• structural change

Question 4

Explanation of trade liberalisation

Answer 4

Involves removing trade barriers by opening up its barriers by opening up its boarder to other countries eg tariffs, quotas and regulations

Question 5

Evaluation of trade liberalisation

Answer 5

• consumers have access to global brands as well as decrease in cost of imports, lower prices for business and consumer
• increases competition for domestic firms

Question 6

Explanation political change

Answer 6

The amount of political corporation that exists between countries

Question 7

Evaluation of political change

Answer 7

The world trade organisation and UN trying to reduce trade barriers between countries, reducing conflict

Question 8

Explanation of reduced cost of transport and communication

Answer 8

Extra costs involved in moving goods around the world can reduce profit margins meaning cheaper transportation of goods overtime encourages businesses to trade globally

Question 9

Evaluation of cost of transport and communication

Answer 9

Containerisation - lowered costs for all firms, reduced barriers of trade and reducing time lag of communication

Question 10

Explanation of increased significance of transnational corporations

Answer 10

Larger MNCs having greater ability to invest in other economies

Question 11

Evaluation of increased significance of transactional corporations

Answer 11

• providing employment for local people in host countries by benefiting from FDI
• local businesses struggling to compete with MNCs causing exploitation

Question 12

Explanation of increased investment flows (FDI)

Answer 12

Investment into a foreign market by an MNC can lead to improved skills, knowledge and technology

Question 13

Evaluation of FDI

Answer 13

• provides opportunities to the host countries to enhance economic development
• opportunities for home country to optimise earnings

Question 14

Explanation of migration

Answer 14

People move address countries for different lifestyles and employment opportunities

Question 15

Evaluation of migration

Answer 15

Migrants bring 1 proactive and determination 2 tend to be well educated
Helping to explain why increased migration can stimulate economic growth

Question 16

Explanation of growth of the labour force

Answer 16

Companies managing to reduce labour costs by seeing labour market as global instead of global or national

Question 17

Evaluation of growth of the global labour force

Answer 17

Helps businesses find the right type of labour to expand or grow, helping to achieve new aims of globalisation and global expansion

Question 18

Explanation of structural change

Answer 18

When an economy shifts its basic functions of operations. Countries change their structure to specific goods and specialise in producing these goods

Question 19

Evaluation of structural change

Answer 19

Positive multiplier ending in greater value