T6 Globalisation Flashcards
What is globalisation
Intergration of international markets with one another
Examples of globalisation
Global Interaction
Living around the world
Capital moving freely
Interdependence
Reasons for globalisation progressing (4)
Free trade and glbal liberisation Improved communication Labour availability and skill Increased MNC's Tech advances Political change Migration Expanding labour forces Increased FDI
Benefits of globalisation(4)
Inc profits Bigger workforce Cheat CoP More variety for consumers Better prices Economies of scale FDI Reduce global inequality
Negatives of Globalisation(4)
Clash of cultures Dependence on other economies Environmental costs Structural unemployment Tax competition and avoidance Brain drain from other economies Less diversity Dumping
Impacts of globalisation on economies(3)
Inc trade Greater comp Economies of scale Inc capital and labour productivity Tax avoidance Structural UE Possible MNC monopolies
Affects of globalisation on LEDC’s(3)
LEDCs can be exploited Real incomes inc in developed countries Increased infrastructure Inc jobs Possible loss of jobs LEDC's can grow
Impacts of globalisation on MEDCs( (developed economies)
Increased trade helps intergration Multiplier effect (injections and withdrawals) Can increase wages Increased trade Changes in employment Inflows from other countries
What are the types of advantages
Comparative and absolute
What is comparative advantage
Where a country can produce at a lower OP than another
What is absolute advantage
Where a coutnry using the same amount of resources as another can produce more
Impact of MNCs on international markets(4)
Foreign competition entering markets Unemployment and deindustrialisation Increased pollution Markets become saturated Inc growth rates in LEDC's Reduced UE Economies of scales Greater variety for consumers Transfer pricing
What is transfer pricing
Where countries have operations in multiple countries, i,e
A is made in a place with high tax rates
A is sold at afake lower price to its company in another country
Product is sold in new country at higher prices with low tax rates
Key reasons for MNC growing/occuring(5)
To operate closer to international markets Gain lower costs Avoid protectionism Profit maxamisation Economies of scales
Impacts of MNCs on LEDCs(5)
Changes to - Job availability Wages and working conditions Local businesses Local comunities Infrastructure SoL
