Globalisation Flashcards
Globalization
Growing interconnection of the worlds economies
Interdependence
Where the actions of one country or large firm will have a direct effect on others
MNCs
Multinational corporations - operate in many different countries
Saturated
Market in which there is a more of a product for sale than people want to buy
Features of globalization
- Good and services are traded freely across international borders
- People are free to live and work,on any country the choose
- Interdependence
- Capital can flow between different countries
- Free exchange of techniques and intellectual property across borders
Reasons for globalization
- Fewer tariffs and quotas
- Reduced costs of transportation
- Reduced costs of communication
- Increased significance of MNCs
Globalization on individual countries
- Benefits: higher GDP, extra output, extra employment, economic growth, improved living standards
- Drawbacks: interdependence between countries
Globalization on governments
- Benefits: gain revenue, supports macroeconomic objectives of lowering unemployment
- Drawbacks: countries cannot trade if international borders are closed
Globalization on producers
Access to huge markets, lower costs, reduced taxation
Globalization on individual countries
- countries where the firm is based will benefit
- benefits: higher GDP, extra output, extra employment, economic growth, improved living standards
- drawbacks: interdependence
Globalization on consumers
Lower prices, more choice, travel opportunities, diverse cuisine, improved standards of living
Globalization on the environment
More environmental damage, increased economic activity therefore more greenhouse emissions, use up non renewable resources
