Globalisation 4.1.1 Flashcards
Define globalization?
The process in which national economies have become increasingly integrated and inter-dependent.
What is the cause of globalization?
Trade liberalization- The greater role of trade organization through countries highing up to the world trade organization-led to trade barriers reducing.
What is the pros of globalization?
-Lower prices benefits everyone because as nations become more integrated-there’s a much bigger market and therefore a greater international competition which puts pressure on prices which increases efficiency and lower costs.
- As a result they will have more choice, consumer surplus and greater market size.
- Businesses are able to benefit since they are able to access to more raw materials through lower prices.
What is another pro of globalization?-employment
Greater employment- As the market size gets bigger and more countries to become integrated and sharing resources-It will be expected for firms to grow in size.
-Therefore, they need to hire more workers-higher incomes-higher living standards-enjoy luxury.
What is another pro of globalization-economies of scale?
Economies of scale- Exploit in size and increase their output which will lower their cost which benefits them by producing high profits which can stimulate more investment and innovation.
What is another advantage of globalization
Free movement of labor and capital
What is another advantage of globalization?-tech
Tech transfers and innovation
What is another disadvantage of globalization-growing inequality
Growing inequality-Trickle down effect: Gov and nations have to set policies that will help lower-income workers to step up.
What is another disadvantage of globalization- High structural unemployment?
As the world becomes much more integrated -where a large number of primary and secondary sectors jobs have moved to low wage economies creating structural unemployment issues in developed countries.
What is another disadvantage-environmental cost?
Pollution has increased significantly as people are using these depleted resources further, as a result, future generations will suffer+ a lack of sustainability.
What are other disadvantage-Trade imbalances?
Trade imbalances- Relying on export-led growth e.g China gain massive gains, but if the avenue of this growth declines it might lead to more protectionist country and trade wars (current account surplus/deficit)
What is another disadvantage of globalization?-culture
Less cultural diversity
what are the factors contributing to globalization?
reduced tariffs and protectionism
what are the factors contributing to globalization?
improved tech-improvement in communication,lower labour costs and greater access to foreign markets.
what are the factors contributing to globalisation?
trade agreements-WTO has helped reducing barriers which lead to greater growth across the world.
