Globalisation.

Question 1

What is Globalisation?

Answer 1

Globalisation involves the increased integration and interdependence of national economies.

Question 2

What are characteristics of Globalisation?

Answer 2

• Globalisation refers to the increasing interdependence of economics factors (producers, consumers, government, entrepreneurs).
• Globalisation is characterised by increasing foreign ownerships of companies, increases in trade in both goods and services, deindustrialisation in developed countries, and increasing global media presence.

Question 3

Causes of Globalisation.

Answer 3

• Improvements in transport infrastructure and operations.
• Improvements in communications technology and IT ( especially the Internet, allowing a global media presence)
• Reduced protectionism ( this is debatable, with the increase in trading blocs’ power)
• Development of international financial markets.
• Increasing number and influence of multinational companies.
• End of the Cold War.

Question 4

What is Deindustrialisation?

Answer 4

Deindustrialisation is a process of social and economic change caused by the removal or reduction of industrial capacity or activity in a country or region, especially heavy industry or manufacturing industry.

Question 5

Costs of Globalisation.

Answer 5

• Possible loss of culture/national identities.
• Footloose companies (which can cause unemployment as they move from place to place)
• Environmental costs from increased use of raw materials.
• Growth of global monopolies with opportunity to exploit consumers.
• Increasing environmental destruction and other negative externalities.

Question 6

Benefits of Globalisation.

Answer 6

• Increased dependency of economies on the output of other economies (could also be a cost).
• Greater consumer surplus and choice.
• Lower prices, through specialisation according to specialisation and also competition.
• Increased economics of scale.