Chapter 9 (Economic impacts of globalisation)

Question 1

Economic growth (on countries)
(Define and Describe)

Answer 1

• Globalisation allows countries to have wider reach and be able to produce and sell goods overseas, leading to economic growth.
• This refers to the increase in trade and businesses within a country.
• As a result, the country will earn more tax revenue.

Question 2

Economic growth (on countries)
(Named Example)

Answer 2

• Foreign direct investment – in 2012 the FDI in Singapore amounted to $747.7 billion.
• Free Trade Agreement – with USA in 2004, included electronics and information technology, petrochemical goods and services.

Question 3

Economic growth (on countries)
(Impact on Singapore/Singaporeans)

Answer 3

• Economic growth will result in more job opportunities for Singaporeans, they are able to earn more money.
• Singaporeans also enjoy a greater variety of goods and services.

Question 4

Economic downturn (on countries)
(Define and Describe)

Answer 4

• Globalisation leads to economic downturn because countries are connected together, and when one country’s economy is not doing well, it will also affect another country, resulting in economic downturn.
• This refers to a slowdown in economic activity of a country.
• Which is the decrease in trade and businesses within a country.

Question 5

Economic downturn (on countries)
(Named Example)

Answer 5

The Global Financial Crisis in 2008, led to rising unemployment in USA which caused problems for American banks, which in turn affected European banks, eventually leading to a global economic slowdown.

Question 6

Economic downturn (on countries)
(Impact on Singapore/Singaporeans)

Answer 6

• Economic downturn will result in less job opportunities for Singaporeans, they are not able to earn money.
• Singaporeans also enjoy fewer goods and services.

Question 7

Higher profits/market share (on companies)
(Define and Describe)

Answer 7

• Globalisation allows MNCs to have higher profits because developments in transportation allow MNCs to locate in other countries.
• Higher profits refer to MNCs setting up their operations in other locations, this results in access to cheaper resources such as land and raw materials, earning more money.
• Higher market share refers to having a greater percentage of the consumers.

Question 8

Higher profits/market share (on companies)
(Named Example)

Answer 8

For example, Xiaomi’s market share of global smartphone sales increased from 0.1% in 2011 to 4.4% in 2014.

Question 9

Higher profits/market share (on companies)
(Impact on Singapore/Singaporeans)

Answer 9

When companies have higher profits, Singaporeans will benefit from higher incomes, improving standard of living.

Question 10

Lower profits/market share (on companies)
(Define and Describe)

Answer 10

• Globalisation results in lower profits because the growth of MNCs to other countries means that there is greater competitions against local businesses which results in lower market share, and thus lower profits.
• Lower market share refers to having a smaller percentage of the consumers.
• Lower profits refers to it being harder to compete due to more competition from other MNCs, thus earning less money.

Question 11

Lower profits/market share (on companies)
(Named Example)

Answer 11

For example, Samsung’s market share of global smartphone sales decreased from 22.5% in 2011 to 19.9% in 2014

Question 12

Lower profits/market share (on companies)
(Impact on Singapore/Singaporeans)

Answer 12

When companies have lower profits, Singaporeans will suffer from lower incomes, decreasing standard of living.

Question 13

Higher income (on individuals)
(Define and Describe)

Answer 13

• Globalisation leads to higher income because it is easier today for individuals to look for jobs overseas due to advancements in technology
• Higher income refers to individuals earning more money.
• Individuals also have access to higher pay and job opportunities.

Question 14

Higher income (on individuals)
(Named Example)

Answer 14

When Singaporeans go over to work in Australia in jobs that are in demand, such as childcare or engineering, they will earn higher income than Singaporeans here.

Question 15

Higher income (on individuals)
(Impact on Singapore/Singaporeans)

Answer 15

When Singaporeans have higher income, they will pay more taxes, which helps government improve infrastructure, giving a better quality of life.

Question 16

Loss of income (on individuals)
(Define and Describe)

Answer 16

• Globalisation, intensified by developments in transportation, allow people to move across countries to find jobs.
• Immigrants from overseas will compete against locals for jobs, resulting in lower income for locals.
• Lower income refers to individuals earning lesser money.
• Lesser job opportunities and lower pay.

Question 17

Loss of income (on individuals)
(Named Example)

Answer 17

Japanese fashion chain Uniqlo first started in Shenzhen, China. Then it moved out of China into Vietnam, where labour costs were half that of China’s, resulting in Chinese people losing their jobs.

Question 18

Loss of income (on individuals) (Impact on Singapore/Singaporeans)

Answer 18

• The loss of jobs and income can be experienced by workers of different skill types
• There would be individuals who lose their jobs and are not highly skilled and are lowly paid
• Thus, they are usually unable to find alternative employment
• Workers who are highly skilled, such as engineers, can also be easily replaced by equally skilled workers from other countries who command lower wages