1. What are the main characteristics of globalisation?: Free movement of capital
and labour across International boundaries, free trade between countries and the
availability of technology and intellectual capital to be used on an international scale
2. In the last 50 years, why has the scale and pace of globalisation increased?:
Trade liberalisation - removal of tariffs etc. may negotiate these with WTO. WTO
raised standards on global products - to increase consumer confidence in imported
goods
Reduction in cost and time needed - for transportation of goods. Cheaper to import
and export. E.g. could be due to larger cargo ships
Improvements in communication - e.g. internet makes trade easier and cheaper
MNC's wishing to increase profits - might built a factory in and LEDC for cheap
labour. Increase in FDI from MNC's
Firms expanding overseas - wish to exploit economies of scale
More MNC's with influence - more international trade and investment as influence
grows
Governments wanting benefits of International trade - e.g. govt might want to
provide incentives for foreign firms to invest in their country
The opening of markets to trade and investment - e.g. after collapse of USSR
economy opens up and globalisation increases through more trade
Growth in international trading blocs
Increased investment by sovereign states - Norway invests some oil revenues in
foreign companies
International specialisation - best at making in one country encouraging
international trade
3. What are some cultural and political factors involved in globalisation?:
International bodies e.g. UN lead to more joint decision between countries and firms
- cultural globalisation e.g. McDonalds
International trade becoming a greater proportion of all trade and de-
industrialisation of MEDC's for industrialisation of LEDC's are both characteristics
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, 4. What are the reasons for big firms setting up companies in emerging
countries?: Cheap labour and same technology and skills needed to produce
products
5. Which factors attract MNC's to invest in a country?: Cheap raw material and
labour, good transport links, access to different markets and pro-foreign investment
governments
6. What are some things globalisation and trade encourage?: specialisation in
economies to create comparative advantage in that country (more efficient than
another country at making a certain product), trade makes bigger markets so
economies of scale are more present and World GDP has risen as a result of
globalization
7. What are some drawbacks of globalisation?: Some prices rise as world
incomes rise so there is sometimes excess demand, Specialisation can lead to
overreliance on markets - e.g. Venezuela over-reliance on oil revenue (not a
specialised markets but the reliance is there :D) and individuals firms could be
outcompeted by foreign firms
8. What are some positives and negatives of MNC's?: Positives
- FDI by these firms creates jobs and therefore wreath and skilled workers. MNC's
also buy local goods and services.
- MNC's can benefit for Economies of Scale (EOS)
- Some believe these firms increase living standards
Negatives
- Some workers in LEDC's are exploited by lower wages
- Can force local firms out of business - maybe can't compete with EOS of MNC's
- These firms can relocate rapidly and care mass unemployment
- Can sue their power to raise price and reduce choice
9. How does globalisation impact the environment?: International
transportation causes more fossil fuel usage and increasing proaction to meet
2/9
and labour across International boundaries, free trade between countries and the
availability of technology and intellectual capital to be used on an international scale
2. In the last 50 years, why has the scale and pace of globalisation increased?:
Trade liberalisation - removal of tariffs etc. may negotiate these with WTO. WTO
raised standards on global products - to increase consumer confidence in imported
goods
Reduction in cost and time needed - for transportation of goods. Cheaper to import
and export. E.g. could be due to larger cargo ships
Improvements in communication - e.g. internet makes trade easier and cheaper
MNC's wishing to increase profits - might built a factory in and LEDC for cheap
labour. Increase in FDI from MNC's
Firms expanding overseas - wish to exploit economies of scale
More MNC's with influence - more international trade and investment as influence
grows
Governments wanting benefits of International trade - e.g. govt might want to
provide incentives for foreign firms to invest in their country
The opening of markets to trade and investment - e.g. after collapse of USSR
economy opens up and globalisation increases through more trade
Growth in international trading blocs
Increased investment by sovereign states - Norway invests some oil revenues in
foreign companies
International specialisation - best at making in one country encouraging
international trade
3. What are some cultural and political factors involved in globalisation?:
International bodies e.g. UN lead to more joint decision between countries and firms
- cultural globalisation e.g. McDonalds
International trade becoming a greater proportion of all trade and de-
industrialisation of MEDC's for industrialisation of LEDC's are both characteristics
1/9
, 4. What are the reasons for big firms setting up companies in emerging
countries?: Cheap labour and same technology and skills needed to produce
products
5. Which factors attract MNC's to invest in a country?: Cheap raw material and
labour, good transport links, access to different markets and pro-foreign investment
governments
6. What are some things globalisation and trade encourage?: specialisation in
economies to create comparative advantage in that country (more efficient than
another country at making a certain product), trade makes bigger markets so
economies of scale are more present and World GDP has risen as a result of
globalization
7. What are some drawbacks of globalisation?: Some prices rise as world
incomes rise so there is sometimes excess demand, Specialisation can lead to
overreliance on markets - e.g. Venezuela over-reliance on oil revenue (not a
specialised markets but the reliance is there :D) and individuals firms could be
outcompeted by foreign firms
8. What are some positives and negatives of MNC's?: Positives
- FDI by these firms creates jobs and therefore wreath and skilled workers. MNC's
also buy local goods and services.
- MNC's can benefit for Economies of Scale (EOS)
- Some believe these firms increase living standards
Negatives
- Some workers in LEDC's are exploited by lower wages
- Can force local firms out of business - maybe can't compete with EOS of MNC's
- These firms can relocate rapidly and care mass unemployment
- Can sue their power to raise price and reduce choice
9. How does globalisation impact the environment?: International
transportation causes more fossil fuel usage and increasing proaction to meet
2/9
