the global economy

Question 1

what is the definition of a global economy

Answer 1

• the term ‘global’ refers to how the economies of most of the countries in the world would have interconnected
• the world has practically become one big market place where countries trade

Question 2

name 3 characteristics of the global economy

Answer 2

international trade
free movement of labor
free movement of capital

Question 3

describe international trade as one of the characteristics of the global economy

Answer 3

the global economy opens the door for higher volumes of international trade with fewer restrictions

Question 4

describe free movement of labor as one of the characteristics of the global economy

Answer 4

people can maximize income by offering labor where income is higher

Question 5

describe free movement of capital one of the characteristics of the global economy

Answer 5

allows investors to choose where it is most profitable for them to invest their money

Question 6

name 3 benefits of the global economy

Answer 6

greater imports and exports
free movement of labor
free movement of capital

Question 7

describe greater imports and exports as one of the benefits of the global economy

Answer 7

leads to more competition for products, reducing prices paid by consumers
greater variety of goods and services
bigger export markets

Question 8

describe free movement of labor as one of the benefits of the global economy

Answer 8

lower unemployment rate locally

Question 9

describe free movement of capital as one of the benefits of the global economy

Answer 9

stimulates investment in poor countries

can lead to economic growth

Question 10

what are the problems associated with the global economy

Answer 10

globalisation is not very beneficial to developing countries

some argue that many countries lose their identity and culture due to globalisation

many developing countries may lose their highly skilled workers to developed countries

profit motive may create sweatshops in developing countries