Globalisation (Macro) Flashcards
Cards on what globalisation is, pros/cons for various stakeholders, comparative and absolute advantage and such assumptions
What is globalisation?
Ongoing process by which world economies becoming increasingly integrated as a result of global developments.
Why has globalisation occurred?
Due to increase in communications, flows of people and money (FDI/Investment), Flows of goods and services due to comparative and absolute advantages.
What is containerisation?
Standard of transporting goods in uniform-sized containers to reduce costs (Stackable)
What are characteristics of globalisation?
-Trade
-Labour migration
-Regional specialisation
-Outsourcing
-Global brands (Apple)
Issues of globalisation for developed nations?
-Increased competition
-Higher sales (Apple in Asia)
-Move away from manufacturing (UK 14%)
-Cut costs
-Brain drain
Issues of globalisation for less developed nations?
-Reapportion
-Exploitation of workers and environment
-Over reliance
-Political influence of western ideals
-Loss of local business
-Skills of labour
Benefits of foreign trade?
Access to cheaper goods/services
Greater range of goods/services
Ability to lower costs through specialisation
What is absolute advantage?
When one country can produce goods/services at lower costs
What is comparative advantage?
When one country can produce goods at a lower OPPORTUNITY COST
Assumptions of comparative advantage?
-No trade barriers
-Fixed factors of production
-Transport costs are insignificant
-Constant returns to scale
How much does foreign trade account for of UK GDP?
30%
Patterns of UK trade?
High imports, falling exports, (Deficit) Trades with NA and EU more than Commonwealth.
