4.4 Globalisation Flashcards
What is globalisation and what are some of driving factors ?
globalisation is the increasing interdependence of countries due to international trade and the flow of labour and capital across boarders
Driving factors:
- reduction of barriers to international trade - removal of barriers such as taxation and regulations that restricted the movement of resources
- improvements in transport - enables producers to trade worldwide, to source and buy factor inputs and sell goods and services
- advances in technology and communications - makes it easier and less costly to travel around the world
How is development measured ?
development is the process of increasing people’s standard of living and wellbeing over time.
Measured through:
- GDP/capita
- life expectancy
- access to healthcare
- access to technology
What is a developed country ?
developed country is a country with high GPD per capita and established industry and service sectors
What is a less developed country ?
less developed country is a country with a developing economy that has lower levels of GDP per capita, lower levels of industrialisation and weaker indicators of wellbeing
What are the cost and benefits of globalisation for producers in developed ?
Anal: wider markets to sell to - potential for vastly increased sales, leads to greater EOC or specialisation
EVAL: vulnerable to problems in the world wide economy e.g if incomes in another country decrease, sales can decrease and FOP supply can decrease
Anal: more skilled labour overseas mean firms will gain higher productivity
Eval: cheaper labour overseas may mean it is tough to compete
Eval: depends if producers increase quality of G+S to keep market share
What are the cost and benefits of globalisation for workers in developed ?
Anal: increased employment due to increased output since economy wants to meet increased demand due to international trade
Eval: depends in increased output comes from increased capital
Anal: increased geographical mobility leads to better pay for workers
Eval: depends on incomes in other parts of the world, lower incomes mean demand decreases, therefore demand for labour also decreases
What are the cost and benefits of globalisation for consumers in developed ?
Anal: wider range and better quality goods and services due to increased competition, means producers have to innovate
Eval: depends on global brands increase in global companies have led to smaller businesses being driven out the market, this means may be less specialisation
Anal: lower prices for goods due to increased competition, increasing standard of living
Eval: volatile prices if prices of raw materials traded globally increase e.g standard of living may not decrease
What are the cost and benefits of globalisation for producers in less developed ?
Anal: increased FDI along with increased government spending leads to better infrastructure
Eval: increased migration of high-skilled workers to developed countries leaves a less productive workforce, less likely to attract FDI
Anal: are able to sell to wider markets as producers can sell world wide
Eval: developing industries may go out of business not able to compete with larger businesses worldwide
Eval: fewer recourses to deal with economic shocks like recession, or reduction in demand for exports difficult for producers to survive
What are the cost and benefits of globalisation for workers in less developed ?
Anal: increased employment due to more FDI, increasing output
Eval: depends if TNC’s are using capital
Anal: increased employment due to increased output due to higher global demand
Eval: depends on vulnerability of global markets if dependent on world market and global demand falls fewer workers will be needed
What are the cost and benefits of globalisation for consumers in less developed ?
Anal: wider range of goods due to lowering of barriers to trade, less developed can access more goods
Eval: depends on incomes in less developed
Anal: better infrastructure due to FDI from TNC’s like better transport links
Eval: depends on productivity in the economy higher productive workforce or cheaper labour attracts more investment from TNC’s
