chapter 9 Flashcards
What is a key economic benefit of globalization for countries?
Economic growth due to increased trade, which generates more wealth.
Provide an example of how globalization has led to economic growth for a country.
Singapore and the US signed a Free Trade Agreement in 2004, allowing free trade of electronics, IT, and petrochemicals, which increased economic growth in these industries.
What is a potential economic trade-off of globalization for countries
Economic downturns in one country can now affect other countries due to interdependence.
Provide an example of how an economic downturn in one country affected others due to globalization.
The 2008 Global Financial Crisis started in the US and escalated to a global recession, causing many international banks to close due to their investments in the US.
How can globalization benefit companies?
Companies can achieve larger market shares by expanding operations internationally, increasing their consumer pool and profits.
Provide an example of a company that benefited from globalization by expanding its market share.
CapitaLand, a Singaporean company, is present in over 20 countries, allowing it to earn more from its real estate business.
How can globalization increase profit margins for companies?
By relocating production facilities to countries with cheaper labor, companies can reduce production costs and increase profit margins.
Provide an example of how a company increased profit margins by relocating production facilities.
MNCs often move production to countries like China and Vietnam due to their low labor costs, resulting in higher profits.
What is a significant trade-off for companies due to globalization?
increased competition from foreign companies can threaten local businesses, especially SMEs.
Provide an example of a company negatively impacted by increased competition due to globalization
Nokia in Finland lost its market share to Apple’s iPhone, leading to its eventual closure.
How does globalization benefit individuals in terms of job prospects?
It allows individuals to move globally in search of better job opportunities and higher income.
Provide an example of how globalization has benefited an individual’s job prospects.
NTU engineers headhunted for jobs in Dubai received triple the pay compared to Singapore, along with a less demanding lifestyle.
What is a potential downside of globalization for individuals?
Globalization can lead to job losses due to increased competition or the relocation of jobs to countries with cheaper labor.
Provide an example of how globalization led to job losses for individuals.
Kraft closed several factories in England, moving production to Poland, which left many factory workers unemployed.
