Globalisation & Multinationals

Question 1

Globalisation

Answer 1

The process of growth in world markets through a process of integration where it is possible to trade in a global market in the same way as one would in a domestic market

Question 2

Globalisation (simplified)

Answer 2

When companies start manufacturing and selling in other countries around the world.

World trading in eachothers markets.

Question 3

6 reasons why products are manufactured outside the UK

Answer 3

1) Cheaper cost of production
2) Cheaper labour
3) Reduced trade restrictions
4) Cheaper resources
5) Better infrastructure
6) Internet

Question 4

4 factors that have facilitated globalisation

Answer 4

1) Technology
2) Easy movement of money
3) Increase in the movement of people
4) Rise of multinationals

Question 5

Multinationals

Answer 5

A company that is based in one country but manufactures and sells products in a variety of other countries

Question 6

4 reasons why companies are keen to become multinationals

Answer 6

1) Economies of scale can be obtained
2) Ability to take advantage of lack of legal constraints
3) New markets with less competition
4) Ability to take advantage of lower wages

Question 7

4 positives of multinational companies

Answer 7

1) Employment opportunities for LEDC’s
2) Develop local skills
3) Investment in local areas (infrastructure)
4) Utilisation of resources

Question 8

7 negatives of multinational companies

Answer 8

1) Future prospects of employees aren’t positive
2) Domestic country workers lefts without jobs
3) Low wages
4) Unsafe working conditions
5) Child labour stopped them from being in education
6) Local companies driven out through competition
7) Income goes back to domestic market e.g. USA