growing economies

Question 1

what is globalisation?

Answer 1

• The process of the world becoming more interconnected
• Increased trade around the world

Question 2

what is GDP?

Answer 2

• GDP = Gross Domestic Product
• The value of all goods and services produced in an economy
• done using PPP = Purchasing Power Parity = takes into account cost of living in each country to make it more accurate
• per capita ( population)

Question 3

what are the characteristics of emerging economies?

Answer 3

• Rapid growth
• Industrialisation
• Increasing openness to trade
• Greater stability – political/social
• growing middle class
• BRICS and MINT
• are economies that have increasing growth rates but relatively low income per head (per capita)

Question 4

benefits of economic growth on businesses

Answer 4

• New market = expansion, sales and profit = Increased wealth = more elastic demand
• Extension to a product life cycle by accessing new market
• Mergers/Takeovers and strategic partnerships
• Low cost labour – outsourcing of production to lower average costs
• Access to raw materials
• Reduced transport costs to get products to markets if they set up overseas

Question 5

benefits of economic growth on individuals

Answer 5

• Employment prospects higher = Possible migration opportunities
• Higher average incomes = better standard of living
• Improved public services (government revenue increases from business tax)
• Foreign Direct Investment by businesses improves local infrastructure
  Roads, communications

Question 6

what are the drawbacks of economic growth?

Answer 6

• Loss of jobs in higher income countries= E.g. call centre jobs outsources to other countries
• Exploitation of resources/people (brand damage, e.g. Nike production techniques, fashion sector)
• Inequality within a country gets worse – business leaders prosper at the expense of the cheap worker

Question 7

what is glocalisation?

Answer 7

adapting products to meet the needs of the regional culture to develop brand power/loyalty