Globlisation

Question 1

Characteristics of globalisation

Answer 1

• Intergration of the worlds local, regional and national economies into a single, international market
• free trade of goods and services, free movement of capital, interchange of technology and intellectual capital
  -more trade between nations.
• more migration and more countries participate in global trade
• countries become more interdependant

Question 2

Factors contributing to globalisation

Answer 2

Trade in goods:
- developing countries have acquired capital and knowledge to manufacture goods
- more efficient forms of transport

Trade in services:
- trade of tourism, and software production has increased in developing countries

Trade liberalisation:
- WTO organisation, which advocates for free trade has contributed to the decline in trade barriers

MNC’s:
- they have sued marketing to become global, they have been able to take advantage of economies of scale

Internatonal financial flows:
- flow of capital and FDI across international boarders has increase. Foreign ownership of firms have increased
- the removal of capital controls has facilitated this

Communications and IT

Containerisation:
- resulted in it being cheaper to ship goods across the world. Causes prices to fall

Question 3

Impacts of globalisation and to individual countries

Answer 3

• Could be trade imbalances between countries
• Could be imbalances and inequalities in consumers and countries accesses to health, education
• Income and wealth inequalities if the benefits and costs of globalisation are not evenly spread
• Culture can be weakened

Question 4

Impacts of globalisation on governments

Answer 4

• Governments may lose their sovereignty

Question 5

Impacts of globalisation on producers and consumers

Answer 5

• They can earn the benefits of specialisation and economies of scale
• Firms operate on amore competitive environment, may be forced to lower costs
• Producers can make average costs lower by producing i a place with cheaper labour
• consumers can take advantages of a wider range of goods and services because of the increase availability

Question 6

Impacts of globalisation on workers

Answer 6

• Can take advantage of more job opportunities
• Structural unemployment because more efficient for manufacturing abroad
• workers can be exploited

Question 7

Impacts of globalisation on the environment

Answer 7

• negative impacts include deforestation, water scarcity, and degradation
• increased consumer living standards may lead to more pollution

Question 8

Role of the IMF

Answer 8

• enables growth/stability and prevents recession
• promoting exchange rate stability
• make sure countries do not default.
  -They will also insist on reforms to the economy as part of financial assistant