Global Interdependance

Question 1

Linkages of Globalisation.

Answer 1

• Trade - Sharing production/labour, etc. between countries.
• Investment - Multi-national corporations having a presence in Aus.
• Tourism - Individuals travelling bringing about inflow/outflow of money in the global economy.
• Immigration - Free travel between countries.

Question 2

Definition of Globalisation.

Answer 2

The worldwide mutual dependence between countries - depending on each other for resources.

Question 3

What facilitates Globalisation?

Answer 3

• Market Liberalisation - The opening of barriers to trade/investment flows; supported by trade organisations (e.g. FTA, UN, etc.).
• Technology - Advancements in transport tech - easier and quicker; opening countries up to globalisation. (e.g. Boats, internet - 24/7 markets).
• Multi-national Corporations - Lead global supply chains and global labour flows - promote FI = globalisation (e.g. Apple, McDonald’s).

Question 4

Positive effects of Globalisation.

Answer 4

• Wider access to a variety of market goods.
• Improving overall SOL (choice, quality, etc.)
• Provides more jobs.
• Lowers commodity prices - comparative adv. of trading goods.

Question 5

Negative effects of Globalisation.

Answer 5

• Environmentally damaging - pollution. Destroys local culture - Macca’s in Nepal.
• Unfair to 3rd world countries.
• The pressure to lower P - decreased working conditions (child labour).

Question 6

Global Trends in Trade.

Answer 6

• Early 2000’s global trade rose exponentially - attitude, industrialisation in Asia (cheap labour), internet/mobile markets open 24/7 and cheaper transportation.
• 2015 Brazil Mine Floods - decrease in global trade
• 2019-2020 US-CHINA Trade war - slowbalistaion tariffs upon each others exports - sourcing out new trade partners.

Question 7

Define International Competitiveness.

Answer 7

For a country to be able to lower the price of their exports, relatively making them more competitive over another country’s product.

Question 8

Main Determinants of Int. Comp.

Answer 8

• Relative Inflation Rates - lower inflation - lower price; increasing competitiveness.
• Exchange Rates - Depreciates - lower price for abroad; increasing competitiveness.
• Labour Productivity - More productive - produce more output for given input - lower price; increasing competitiveness.

Question 9

How are governments more efficient with Int. Comp?

Answer 9

• Fiscal Policy - Tax, welfare, etc. - promote economic growth/stability; increasing international competitiveness.
• Legislation - Aus have strong anti-corruption legislation - providing new business; increasing international competitiveness.

Question 10

How can business be more efficient with Int. Comp?

Answer 10

• Productivity - More productive priv. Business is more competitive.
• Labour Markets - Education level of labour force, quality/quantity of labour available; impact competitiveness.
• Management Practices - Get the most out of workers; law, etc. More competitive.

Question 11

How can infrastructure be more efficient with Int. Comp?

Answer 11

• Basic infrastructure - Allow free movement - transport (roads) - more competitive.
• Technology - Easy access to ICT/internet - more competitive.
• Health - Public health care/access - labour force healthy and more competitive.
• Education - Public/quality education - increased labour force quality; more innovative and efficient - more competitive.