13203701
Description
Flashcards by Hari Kumarakuruparan, updated more than 1 year ago
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Created by Hari Kumarakuruparan
about 6 years ago
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| Question | Answer |
| definition of globalisation | -defined as the ever-increasing integration of local, regional and national economies into a single global market. |
| Characteristics of globalisation | - free trade across national boundaries of goods and services - free movement of labour between countries -free movement of capital - free interchange of technologies and intellectual capital. A US firm for example can protect its patents in a different country on the say terms as the US. Use of patented technology in different countries |
| Causes of globalisation | -trade in goods, goods are increasingly being manufactured abroad to exploit cheaper labour and lower production costs. Developing countries acquire the capital and the production techniques usually from MNCs - trade in services - trade liberalisation, lower protectionist barriers have encouraged growth in world trade. -MNCs, large economies of scale, successful marketing to create global markets, monopoly power. - communications and IT, shrunk the time needed for economic agents to communicate with one another. A 'death of distance' |
| Impact on consumers | - consumer choice - availability of goods have increased with specialisation and trade - prices - globalisation is leading to the fall in price of some goods and services because of the shift of production from high cost to low cost countries. labour costs. Globalisation of technology also means a much lower price is achieved. - income - raised incomes globally. consumers are able to buy more goods, this has raised the price of some goods, especially goods which are supply inelastic. |
| Impact on workers | - unemployment and employment - losers and winners, developed countries have seen industries leaving to establish themselves in developing countries. Structural unemployment. - migration - economic migrants moving to increase their standard of living have put a downward pressure on wages as competition for jobs , especially low skilled, have increased as a result. They fill skill gaps. Strain on housing, education and healthcare. - wages - workers competing on a global scale. Wage rates are being pushed down in developed countries whilst the opposite is happening in developing countries. - MNC's- FDI usually from MNCs are criticised of only providing low skilled low paying jobs to host country, whilst importing more highly skilled labour to take on managerial roles. |
| Impact on producers | - specialisation and dependancy - firms and economics agents are increasingly dependant on each-other. increased specialisation inevitably increases risks when trade links break down. - costs and market - firms are able to source products from a wider range of suppliers. this reduces dependancy on one firm. The wider the supply network the cheaper the good is likely to be. Also opens markets, more customers. - footloose capitalism- firms are able to shift production facilities from country to country to suit needs and exploit comparative advantage. leads to destruction and creating of jobs. - tax avoidance- firms based in numerous countries MNCs, are able to find ways to evade taxes. One way is to transfer production facilities to low tax countries (Ireland, Luxembourg ). Or ownership of a key production element is assigned to a low tax country for example a patent. |
| Impact on government | - footloose capitalism has lead governments to be forced to adopt policies in order to capture a large proportion of the benefits of globalisation. - lowering tax - supply side policies - increase the competitive edge of the country - prone to bribery |
| Impact on environment | - increasing world production has lead to increased pollution and global warming. global output has increased for example in extraction industries. - more developed countries and MNCs are better able to reduce this impact through R&D and more efficient production techniques due to their sheer size. - smaller firms and developing countries on the other hand struggle. - impact on culture |
| Impact on countries | - employment -consumer choice -price -trade balance -investment -wages -economic growth |
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