Global Interdependence

Question 1

What is the meaning of globalisation?

Answer 1

the freer movement of g & s, investment, ideas and people around the world. It implies the opening up of international borders to the flow of trade, workers, tourists and investment

Question 2

What are the trend affecting the relationship between trade and development?

Answer 2

• economic growth of many developed countries
• growing intergration of global production through supply chains
• higher prices for agricultural goods and natural resources
• increasing interdependence of the world economy, which causes shocks to reverberate more quickly and globally

Question 3

What are the main exports and imports in Australia?

Answer 3

exports

• resources i.e. iron ore, coal, natural gas, gold and bauxite

imports

• capital goods
• machinery
• motor vehicles
• consumer goods

Question 4

What are the factors affecting economic transactions between different economies?

Answer 4

• exchange rate
• world economic growth
• domestic economic growth
• relative inflation rises
• relative interest rises
• productivity and cost efficiency

Question 5

What are the key drivers of competitiveness?

Answer 5

• economic performance - domestic economy, international trade, inflation and unemployment
• government efficiency - public finance, fiscal policy, business legislation, insitutional framework
• business efficiency - productivity, labour market, finance management practices
• infrastructure - basic infrastructure, technological infrastructure, health, education

Question 6

What are the indicators of how goods, capital and peopl become more globalised?

Answer 6

• value of exports as a % of world GDP increased from 19& (in 1980) to 30% (in 2013)
• since 1980, inflows of foreign direct investment have increased by a factor of thirty
• the number of international tourist arrivals have quadrupled from 1980 to 2013

Question 7

What are the key determinants of competiveness?

Answer 7

• changes in labour productivity due to factors such as technology, education and training
• changes in a country’s price level (inflation) relative to its trading partners
• changes in a country’s wages relative to its trading partners
• changes in the exchange rate

Question 8

What are the causes of globalisation?

Answer 8

• the liberalisation of markets to the flow of g & s and investment
• technology
• multinational corporations

Question 9

What are the arguments against globalisation?

Answer 9

• it favours the richer, developed nations - global poverty has not been reduced and income inequality has increased
• free trade resultd in job losses in less competitive economies as by erecting barriers to trade such as tariffs, local jobs can be oritected against unfair competition
• it is unfair to developing countries and volatile capital flows have destabilised developing countries
• increases environmental damage
• erodes democracy
• lowers wages and entrenches th euse of child labour
• worsens poverty

Question 10

What are the arguments for globalisation?

Answer 10

• provides access to a wider variety of g & s
• lowers prices and provides more and better oaying jobs
• reduces global poverty
• increases economic growth and overall living standards
• it has enabled developing economies to access foreign investment
• increases multiculturalism