Factors of Globalisation

Question 1

What factors effect globalisation?

Answer 1

• Financial systems
• Trade agreements
• Transport and communications
• Management and information
• Preventing security threats

Question 2

How to financial systems promote globalisation?

Answer 2

• In the 1980s the following things happened to make the financial system more global:
• Information technology, e.g. internet, allowed investors greater access to information. Investors could find out weather a company was worthy of investment
• Governments undertook financial deregulation where they relaxed rules about banks, such as allowing banks to charge people for their services and invest in a wider range of businesses

Question 3

How do trade agreements help remove trade barriers?

Answer 3

• Trade is regulated by countries governments, who control which products are let into the country and at what price
• E.g. Tariffs, non-tariff barriers and banning of certain products
• Trade agreements and Bilateral/Multilateral trade agreements

Question 4

What are tariffs?

Answer 4

Taxes of products coming into the country

Question 5

What are non-tariff barriers

Answer 5

E.g. Rules on the quality of products coming into the country

Question 6

What are Bilateral trade agreements?

Answer 6

• Trade agreements between two countries

- Both countries remove restrictions for each other, benefitting companies and consumers from both countries

Question 7

What are multilateral trade agreements?

Answer 7

• Trade agreements between several countries

- All countries involved agree to remove tariffs and other controls

Question 8

How does the WTO (world trade organisation) fit into the global trade system?

Answer 8

• Established in 1995, the WTO sets rules on how countries can trade with each other
• E.g. Imposing unfair tariffs on each others companies
• Acts as a forum for countries to negotiate trade deals and settle trade disputes

Question 9

How have transport and communication systems improved global business?

Answer 9

• Improved transportation with high speed rails, larger and faster ships/planes and have allowed people and products to get to places easier and quicker
• Uniform metal shipping containers introduced in 1950, allowing more goods to be loaded onto ships
• Communication satellites first launched into Earth’s orbit in 1960s, allowing cheaper wireless communication
• Optic fibre cables use signal of light to transmit information quickly
• Significant growth in software allowing free communication