Paper 1 Globalistaion

Question 1

What is globalization

Answer 1

Worlds economies becoming steadily more connected to one another.

Question 2

Consequences of globalization

Answer 2

Increasing number of large companies - multinationals produce goods + services in more then 1 country.

Volume of international trade is risen enourmaslt as consumers purchase larger quantities of imported goods

Question 3

Why globalization game place?

Answer 3

Barriers to international trade have been slowly reduced

Consumers incomes have risen in many countries - but more products overseas

Internet enable smallest business to sell products throughout world

Question 4

Benefits of globalization

Answer 4

Access to new markets - achieve growth and enjoy economies of scale. (Sell products cheaply)

Rising inward investment - industries expand and pay for construction

New and cheaper resources - overseas employees accept lower wage

Improve,met in production methods - increased competition from foreign countries

Question 5

Drawbacks of globalization

Answer 5

Increased competition- overseas businesses enjoy lower costs and more efficient

Risk of economic, external shocks - globalization connects countries economies. Problem in 1 = spread to others

Risk of takeover - easier for overseas businesses to buy up businesses

Tax avoidance - multinational companies can organise production so they pay lower tax in UK