Flows Of Capital

Question 1

What does capital consist of ?

Answer 1

Money moving between counties which is used for investment / trade / protection

Question 2

What do periphery counties suffer from?

Answer 2

Lack of investment.
Leakages.
Out migration.

Question 3

Foreign direct investment.

Answer 3

Made mainly by TNCs based in one country .

Investing company may make its overseas investment in a number of ways.

Question 4

Repatriation of profits.

Answer 4

TNCs investing in overseas production will normally take any profit made from that investment back to their home country headquarters.
‘Economic leakage’
Based in richer countries.

Question 5

Aid.

Answer 5

Support for poor countries.
Provided through UN contributions made by rich countries.
Provided bilaterally.

Question 6

Migration .

Answer 6

Out migration from poor - rich.
Exacerbate disparities as less developed nation lose skilled workers.
As they will spend money / tax in destination country.
Send remittances back.

Question 7

Remittances payments.

Answer 7

Transfers of money made by Foreign workers to family.

2nd most important source of income in LICs.

Question 8

Define diaspora.

Answer 8

Large group of people with similar heritage or homeland who have moved and settled in places all over the world.