EQ1: 3.2

Question 1

3 international organisations

Answer 1

• International Monetary Fund
• World Bank
• World Trade Organisation
  Key players making decisions about the world economy

Question 2

What is free trade?

Answer 2

Trade taking place completely free of restrictions

Question 3

What is protectionism?

Answer 3

Barriers to protect a country’s own industries from competition

Question 4

What is Foreign Direct Investment (FDI)?

Answer 4

Investment in business from another investor in another country where the investor then owns more than 10%

Question 5

As an organisation what are IMF’s aims?

Answer 5

To maintain international financial stability, stabilise currencies

Question 6

How does it work?

Answer 6

Lends money for development purposes, forces countries to privatise government to increase size of private sector in return for loans

Question 7

But what are their criticisms?

Answer 7

Forced poorer countries to sell off assets to wealthy TNCs, Greek debt crisis after 2008 - forced to cut back on its government expenditure - known as austerity

Question 8

As an organisation what are World Bank’s aims?

Answer 8

Finance economic development, humanitarian emergency

Question 9

How does it work?

Answer 9

Uses bank deposits - by world’s healthier countries - provides loans for developing countries that agree to certain conditions - repayment & economic growth

Question 10

Any criticisms?

Answer 10

First loan - France for post-war destruction

Question 11

As an organisation what are WTO’s aims?

Answer 11

Trade liberalisation - want to remove all barriers for world’s poorer regions

Question 12

How does it work?

Answer 12

Encourages all trade between countries free of tariffs, quotas or restrictions

Question 13

But what are their criticisms?

Answer 13

By 2016 - 162 member states

Question 14

What are tariffs?

Answer 14

known as barriers

Question 15

What are Quotas?

Answer 15

set amounts which could not be exceeded

Question 16

What is a trade bloc?

Answer 16

Group of countries which make agreements to reduce barriers to trade e.g by removing tariffs (taxes on important goods)

Question 17

How do National Governments play a role in gloablisation?

Answer 17

By trade blocs as it increases trade between members who can work together as a larger organisation to trade with non-members

Question 18

Give an example of a trade bloc

Answer 18

EU - 27 members, in Europe - North of map, sustainable development & aims to offer citizens security - without internal borders but there’s a lack of transparency with countries outside the EU the & lack of movement for people

Question 19

Give another example of a trade bloc

Answer 19

ASEAN - 11 members, in South of East Asia - developed & emerging countries, benefits - free trade, free movement of labours & capital, peace & stability - no nuclear weapons, criticisms - certain government corruptions, & demographic changes

Question 20

Name some benefits of trade blocs

Answer 20

• reduce competition - easier to get goods for country

- become each others exports - so there’s reliability

Question 21

Name some criticisms of trade blocs

Answer 21

• free movement for labour - immigrants can move around countries in that trade bloc - issues with money
• safety standards ignored - producing cheap goods

Question 22

Name some economic policies

Answer 22

Free market liberalisation
Privatisation
Encouraging business start-ups

Question 23

Describe free market liberalisation

Answer 23

removal of government regulations to encourage economic development - less strict
e.g Margret Thatcher in the 80s - trickle down approach - ‘rich get richer, poorer will get richer’ - not true

Question 24

What is privatisation?

Answer 24

transfer of assets from the public (government) sector to the private sector - to raise more money

Question 25

An example of National governments playing a role in globalisation was by SEZ - name one & explain it

Answer 25

China’s ‘Open Door’ policy - 1978 - it happened to allow China to embrace globalisation - as it was a poor & switched off country to other countries - they had no global connection politically

Question 26

With China’s ‘Open Door’ policy, what were they actions they did to ensure this happened?

Answer 26

• TNC’s became involved through SEZ
• Farmers were allowed to trade - allowing poorer areas to grow
• 1 child policy - to control famine

Question 27

What are SEZ (special economic zones)?

Answer 27

industrial area - favourable conditions created to attract TNCs e.g China’s ‘Open Door’ policy, low tax rates, exemption from tariffs + export duties

Question 28

What are subsidies & give an example?

Answer 28

Grants given by governments to increase the profitability of key industries e.g Margret Thatcher - businesses survive on subsidies but didn’t support them with competition, e.g coal mining

Question 29

FDI - Give positives and negatives of TNCs investing with poorer countries

Answer 29

Positives - helps a country grow - literacy rate, health etc

Negatives - environmental issues, local businesses excluded, larger gap between urban and rural areas

Question 30

What are the 4 MAIN flows?

Answer 30

Commodities
People
Migrants
Capital (money)