Chapter 9: Globalisation

Question 1

Emerging economies

Answer 1

Rapidly growing economies which have huge growth potential but also pose significant risks

Question 2

Globalisation

Answer 2

Growing integration of the world’s economies

Question 3

Concept of globalisation (5)

Answer 3

• Goods & services traded freely across international borders
• People free to work & live in any country
• High level of interdependence between nations (events in one economy likely to affect other economies)
• Capital can flow freely between different countries
• Free exchange of technology & intellectual proerty

Question 4

Intellectual property

Answer 4

People’s knowlegde or creative ideas that have commercial value & are protectible under different forms of copyright

Question 5

Monetary system

Answer 5

System of money in a particular country or the world as a whole, & the way that it is controlled by governments & central banks

Question 6

Saturate market

Answer 6

To offer so much of a product for sale that there is more than people want to buy

Question 7

Reasons for globalisation

Answer 7

• Developmens in technology
• International transport networks have improved in recent years
• Huge amount of deregulation
• Increase in tourism
• Firms want to sell abroad

Question 8

Government & globalisation

Answer 8

Globalisation is dependent on government, because if governments keep international borders closed & puts up trade barriers, countries cannot trade with each other

Question 9

Opportunities

Answer 9

Access to larger markets, lower costs, access to labour, reduced taxation

Question 10

Threats

Answer 10

Competition, international takeovers, increased risk of external shocks

Question 11

Access to larger markets

Answer 11

Provides growth opportunities for businesses which should result in higher sales revenue & increased profits

Question 12

Lower costs

Answer 12

Selling more output to larger markets may help businesses to lower costs, this means they can exploit economies of scale. Lower costs helps a business become more competitive, allowing them to win a larger share of the market, increase sales & raise profit margins

Question 13

Access to labour

Answer 13

• Workers from overseas boost labour supply if business expands rapidly
• More choice so may be able to recruit better quality workers (improves productivity)
• Rising labour –> lower wages —> lower costs
• Highly skilled staff can be recruited from anywhere, helping to fill skill gaps

Question 14

Reduced taxation

Answer 14

Businesses can locate their head office in a country where business taxes are low

Question 15

Competition

Answer 15

Some businesses may have their survival threatened, while some industries may be completely wiped out

Question 16

International takeovers

Answer 16

Possible for businesses to take over businesses in other countries, makes companies feel vulnerable to takeover since there are many predator businesses. Some experience a hostile takeover

Question 17

Increased risk of external shocks

Answer 17

Interdependence could pose a threat to businesses (event in one economy likely to affect others)

Question 18

Predator

Answer 18

Business that tries to use another’s weakness to get advantages

Question 19

Hostile takeover

Answer 19

Takeover that the company being taken over does not want or agree to (done against their will)

Question 20

Bid

Answer 20

Offer to pay a particular price for something