Macroeconomics- int trade, other things

Question 1

Define globalisation

Answer 1

The growing interconnectedness of the world’s economies

Question 2

Drivers of Globalisation

Answer 2

Improved Transportation
Multinational Companies
Reduction of Trade Barriers
Improvements in Communication Technology
Deregulation by Global Government

Question 3

Reasons for emergence of MNCs

Answer 3

Economies of Scale
Access to natural resources/cheap materials
Lower Transport and Communication Costs
Access to more consumers

Question 4

Benefits of MNCs

Answer 4

Job Creation
Investment in Infrastructure
Developing Skills
Developing Capital
Contribution to Taxes

Question 5

Disadvantages of MNCs

Answer 5

Tax Avoidance
Environmental Damage
Moving profits abroad

Question 6

SPICED

Answer 6

Strong Pound Imports Cheaper Exports Dearer

Question 7

WPIDEC

Answer 7

Weak Pound Imports Dearer Exports Cheaper

Question 8

Appreciate Definition

Answer 8

where the value of a currency rises owing to market forces- the exchange rate increases as a result

Question 9

Revalued Definition

Answer 9

when a government fixes a higher exchange rate

Question 10

Depreciate

Answer 10

where the value of a currency falls owing to market forces- the exchange rate falls as a result

Question 11

Devalued

Answer 11

when a government fixes a lower interest rate