Unit 4: Globalisation Flashcards
Define Globalisation.
(Edexcel Definition): The ability to produce any goods or service anywhere in the world; using raw materials, component, capital & technology from anywhere; sell the resulting product anywhere, and place the profits anywhere.
(Textbook Definition): A process by which the world’s economies are becoming more closely integrated.
What are the 7 causes of Gloabalisation?
Improvements in Transportation
Improvements in Technology + Communications
Reduction of Trade Barriers
Trading Blocs
Deregulation of Markets
Increased Capital Mobility
Increased Significance of MNCs
How does Globalisation impact Consumers?
A: Increased Competition = Cheaper prices, Better Quality / Efficiency
A: Increased Variety
How does Globalisation Impact Producers?
A: Cheaper Raw Materials
Access to a Larger Market
More Revenue for MNCs
D: Reduced prices means less profit
Prices have to lower due to more competition; less revenue
How does Globalisation Impact Workers?
A: More job opportunities in developing countriess (resources are cheaper)
Multiculturalism
D: Less job opportunities in developed countries
Labour Exploitation
How does Globalisation Impact Individual Countries?
A: Less Unemployment (more labour to keep up with demand)
Better Standard of Living
D: Westernisation
Possible BoP deficit
How does Globalisation Impact the Government?
A: Possible Trade Surplus
More tax revenue
D: Possible trade deficit Possible recession (which spreads quicker)
How does Globalisation Impact the Environment?
A: (possibly) more awareness on environmental issues; more caution
D: more transportation means more pollution
What are the Characteristics of Globalisation?
Globalisation is the ever increasing integration of the world’s local, regional and national economies into a single, international market.
It involves the free trade of goods and services, the free movement of capital and labour and the free interchange of technology and intellectual capital.
With the spread of globalisation came more trade between nations and more transfers of capital including FDI (foreign direct investment). Moreover, brands developed globally and labour has been divided between several countries. There is more migration and more countries participate in global trade, such as China and India, as well as higher levels of investment.
Additionally, countries have become more interdependent, so the performance of their own country depends on the performance of other countries. This could be seen in 2008 and 2009, when the effects of the global credit crunch spread across the globe.
