Globalisation

Question 1

Who coined the term “global village” and what do they mean by this?

Answer 1

Marshall McLuhan coined the term “global village” in the late 1960s.
Global Village means free rein is given to economic and information flows.

Question 2

How does the “global village” change the way organisations operate?

Answer 2

They think globally (not confined within national boundaries)
They act globally ( become more present in many countries)
They make “planet- wide” decisions

Question 3

How is the global village ideology exaggerated?

Answer 3

Obstacles to trade remain

Globalisation has barely begun in some sectors

Question 4

When and why was globalisation slowed down?

Answer 4

The 2008 global financial crisis slowed globalisation temporarily
Recovery from this process has hit set backs such as international conflicts
Progress has been made with international trade and access to markets however the world is still not “flat”

Question 5

What has international trade lead to?

Answer 5

Lead to a “world economy” in which prices, supply and demand are affected by global events

Question 6

How has trade changed since WW2?

Answer 6

Grown enormously

Manufactured goods have grown from US$100Billion 1956 to US$19 Trillion in 2013.

Question 7

What is a definition to capital flows?

Answer 7

The movement of money for the purpose of investment, trade o to purchase goods/provide services. Usually regarded as investment into a production operation

Question 8

What is the definition for globalisation?

Answer 8

A process by which national economies, societies and cultures have become increasingly integrated through the global network of trade, communication, transportation and immigration.

Question 9

What is the definition of international trade?

Answer 9

The exchange of capital, goods and services across international borders.

Question 10

What is the definition of labour

Answer 10

Factor of production which requires physical and mental human effort used to create goods or provide services.

Question 11

What Are the 6 factors of globalisation?

Answer 11

Economy - trade and aid, TNCs and capital flows
Society - migration and social networks
Culture - ‘westernisation’ and cultural diffusion
Technology - higher productivity, transfer to LEDCs and communication
Environment - impact and degradation, linked by ‘commons’
Politics - trading groups, governmental and global institutions

Question 12

What are the 4 factors of production ?

Answer 12

Land- all natural resources ( minerals, soil, water, forests, etc)
Labour- human resource available to the economy
Capital- physical resource ( buildings, factories etc) involve the transfer of physical resources from one place to another. Usually refers to investment.
Enterprise- those who take a risk and establish a business or organisation for the production of goods and services

Question 13

What is the ‘flow of capital’ ?

Answer 13

All money that moves between countries which is used for investment, trade or production is knows as ‘international capital flows’

Question 14

When did deregulation of world financial markets take place and what did they mean?

Answer 14

Took place in the late 20th century
Meant that the activities of financial institutions such as banks, insurance companies and investment companies were no longer confined within national boundaries

Question 15

What is economic globalisation caused by and what are the characteristics

Answer 15

Caused by - increase in free trade, growth of transnational corporations, faster and cheaper transport and global marketing
Characterised by - long distance flows of goods, capital and services as a well as information and market exchanges

Question 16

What is cultural/social globalisation caused by and how is it characterised

Answer 16

Caused by- migration, global communication networks, impact of western culture through media, sport, leisure and celebrity
Characterised by- spread of ideas, information and images

Question 17

What is political globalisation caused by and what are the characteristics?

Answer 17

Caused by- growth of western democracies and their influence on poorer countries, decline of centralised (communist) economies (though communist political control is still strong in China and Russia)
Characterised by - the diffusion of government policy and development of market economies in former communist states

Question 18

What is BRIC?

Answer 18

Brazil, Russia, India and China whose economies have advanced rapidly since the 1990s

Question 19

What is diaspora?

Answer 19

A large group of people with a similar heritage or homeland who have moved and settled in places all over the world

Question 20

What are economic leakages ?

Answer 20

Loss of income from an economic system. Usually refers to the profits sent back to their base country by transnational corporations, also known as profit repatriation

Question 21

What is MINT?

Answer 21

Mexico, Indonesia, Nigeria and Turkey who are the more recently emerging economies.

Question 22

What is Foreign Direct Investment?

Answer 22

An investment made mainly by TNCs based in one country, into the physical capital or assets of foreign enterprises.

Question 23

What are Repatriation of profits?

Answer 23

TNCs investing in overseas production will take profit made from that investment back to there home country.

Question 24

What is aid? Define multilateral and bilateral.

Answer 24

Financial support for poorer countries.
Multilateral - number of countries making contributions (UN)
Bilateral - one government to another, usually with mutual conditions applied.

Question 25

What is migration?

Answer 25

Majority of out-migration of labour is from poorer to richer countries.
Poorer workers lose there most skilled workers, who will pay taxes and spend their earnings in foreign countries.

Question 26

What are remittance payments?

Answer 26

Transfers of money by foreign workers to family in their home country.

Question 27

What are the the key facts about the movement of labour?

Answer 27

From developing countries to the richer nations
Major destination oil rich gulf states (Kuwait, Qatar, Saudi Arabia,UAE)
Most migrants move over short distances within the same region or between neighbouring regions
Most migrants have some education and financial means
Largest flow in Asia (2005-2010 5million workers South Asia-west Asia)

Question 28

Key facts about the remittance dilemma in Somalia ?

Answer 28

2012, 40% of somalians relying on remittances to meet their basic needs
Remittances are 50% of GNI and 80% of all investment into the country
Concern that this money was aiding terrorist groups caused US and U.K. Withdrawing the service.

Question 29

Why did the US and UK withdraw money from Somalia in 2012?

Answer 29

Little government regulation over the economy
Lack of anti- money laundering laws
Suspicious activity reports for money transmitters
Some remittances going to terrorist group Al-Shabaab

Question 30

How are flow of products facilitated and define these reasons

Answer 30

Reduction in costs of trade (transaction, tariffs, transport and time)
Transaction costs reduced with improved flow of data making transfer of capital quicker
Transport and time reduced by containerisation
Tariffs reduced in global trade by World Trade Organisation

Question 31

Define containerisation

Answer 31

Standardised transport using large standard-size steel containers to transport goods

Question 32

Define protectionism

Answer 32

Deliberate policy by government to restrict trade in goods and services with other countries

Question 33

Define tariffs

Answer 33

Tax or duty placed on imported goods making them more expensive to consumers to promote home-based goods (strategy of protectionism)

Question 34

What are services ?

Answer 34

Economic activities : financial and insurance
High - level services - services to businesses (finance, investment and advertising)
Low - level services - services to consumers (banking, travel and tourism, call centres or communication services)

Question 35

Which cities are high level services concerntratdednin?

Answer 35

London, new