4.1Globalisation

Question 1

growth rate of UK economy compared to emerging markets

Question 2

indicators of economic growth

Answer 2

1. GDP (Gross Domestic Product) – a measure of the size of an economy, the sum of everything a country produces.
2. Health – e.g. life expectancy. Higher life expectancy = more years paying taxes which is good for the economy.
3. Literacy – the percentage of adults who can read and write. The higher the literacy level the better.
4. HDI (Human Development Index) – it combines; life expectancy, education and income of the population.

Question 3

implications of economic growth
employment

Answer 3

• Growing economies start to see changes in employment patterns; working women, migration, the rise of the multi-job, home working and the search for a better work-life balance.
• The countries that manage to pull themselves out of poverty and get richer are those that are able to diversify away from agriculture and other traditional products.
• As labour and other resources move from agriculture into modern economic activities, overall productivity rises and incomes expand.
• These economies see a structural change in employment from primary sector businesses to secondary and tertiary.
• In essence, there is the rise of the service sector as incomes rise and so does the demand for; cleaners, gardeners, hairdressers, restaurants, shopping etc.

Question 4

implications of economic growth
Trade

Answer 4

• Economy growth = rise in disposable income & consumption growth = increase in demand for goods = increased revenues and profits = opportunities for trade
• Basically – economic growth means more money and more money means trading can be made easier/possible – can afford to pay tariffs etc. for imports and exports.

Question 5

define an emerging ecnomy

Answer 5

a country in the process of rapid growth and industrialisation. These economies are making a transition and have the potential to become developed economies in the future.

Question 6

BRICS as emerging economies

Answer 6

Brazil, Russia, India, China and South Africa

Question 7

potential oppportunities for emerging economies

Answer 7

• Growing number of middle class consumers who have increasing disposable income
• Demand is likely to be income elastic, and therefore increase as incomes do
• Cultural shifts result in higher demands for personal products, private education and private healthcare
• Increase demand for infrastructure
• Opportunities for high-skilled but low-cost labour
• Greater potential for joint ventures or acquisitions
• Greater access to raw materials
• Further investment opportunities

Question 8

potential threats for emerging economies

Answer 8

• Increasing pool of high-skilled, low-cost labour
• Undervalued currencies make their exports cheaper
• Inadequate protection of the brand or other intellectual property
• State subsidies of industries to make them more globally competitive

Question 9

key risks of investing in emerging economies

Answer 9

• Political instability
• Cultural differences
• Variable approaches to legal and financial dealings
• Corruption and bureaucracy
• Emerging markets becoming major exporters in their own rights

Question 10

MINT economies

Answer 10

• Mexico
• Indonesia
• Nigeria
• Turkey

Question 11

define a developed country

Answer 11

A developed economy refers to an industrialised country with a high level of per capita income, good general standard of living and effective infrastructure as well as high levels of literacy, education and health.