Globalisation

Globalisation

1. Pros

   • Economies of scale
     • Advanced technology lowers production costs for firms
   • Trade enhances division of labour
     • Quicker production process, increases employment in local economies
   • Increases competition
     • Reduces monopoly power and profits
   • Economic growth
     • Higher per capita incomes
       • Reduces extreme and relative poverty

2. Cons

   • Rising inequalities on income and wealth
     • Growth of MNCs benefits most skilled and most wealthy
     • Inflation
       • Economic growth sees rise in price for goods and services
         • Poorest will struggle to afford goods and services
           • Rise in price of commodities such as food
   • Macroeconomic instability
     • Economies can become more vulnerable to external shocks