Globalisation Flashcards
1
Q
What is globalisation
A
increasing integration of economies internationally
2
Q
three main characteristics of globalisation
A
- Free movement of capital and labour across borders
- free trade in goods and services between different countries
- Availability of technology and knowledge between countries
3
Q
other impacts of globalisation
A
- increase in financial capital flows between countries
- more international trade
- de-industrialisation of HIC, industrialisation of LIC
- increase in foreign ownership of firms
4
Q
MNC
A
Multi National Corporation
5
Q
what attracts MNC’s
A
- Cheap and available labour
- Good transport links
- Lenient Government policies on investment and environmental
- Access to different markets
6
Q
Causes of Globalisation
A
- Trade Liberalisation
- Improved communication
- cheaper and quicker transport
- Increased number of hugely influential MNC that put FDI into LICs
- Increased specialisation
- Growth in international trading blocs
7
Q
Trade Liberalisation
A
Removal or reduction of trade restrictions
8
Q
Benefits of globalisation
A
- Increased specialisation in goods where the country has a comparative advantage increases output and efficiency
- Producers benefit from economies of scale so lower production costs and lower prices
- Greater variety
- Rise in World GDP and reduction in poverty so better worldwide living standards
- Increased Growth and employment
- Increased Innovation due to more competition and free sharing of ideas
9
Q
Problems with globalisation
A
- Rising prices of goods worldwide as people have more money to spend
- Economic dependency so shocks will have greater effects, unstable
- Increased world trade led to global BoP imbalances leading to protectionism
- specialisation can lead to overreliance or unflexibility
10
Q
Positive effects of MNCs
A
- FDI by MNC creates new jobs and brings new skills and wealth
- MNC buy local goods so help locals to expand businesses and bring in foreign currency
- MNC economies of scale so their more efficient
- Provide employment which raises living standards
11
Q
Negative effects of MNCs
A
- exploit workers with low wages
- Force local firms out of business
- Influence and pressure Governments policies to their advantage and the countries detrement
- withdraws money from countries circular flow
12
Q
Why is globalisation bad for the environment
A
Increases in industrialisation and international trade means that more fossil fuels are used which contributes to pollution and climate change.
13
Q
Benefits of globalisation in LICs
A
- Provides jobs with stable wage reducing unemployment
- More efficient production techniques and technology are brought to the country
- increase of FDI
14
Q
problems of globalisation in LICs
A
- MNC profits don’t stay in home country so does nothing to help poverty
- Skilled workers will leave to work in more developed higher paying countries, brain drain and reduces growth
- Local firms can’t compete with MNCs
15
Q
problems of globalisation in HICs
A
- Cheap overseas manufacturing lead to severe reduction in industries causing structural unemployment
- de-industrialisation leads to fall in exports
- success of NEE damaged HICs
- Increased imports worsens BoP
16
Q
benefits of globalisation in HICs
A
- Cheaper raw materials and production costs
- MNCs gain access to cheap labour so low production costs
- Increases innovation through competition
