Globalisation questions
Yellow = online plan
Blue = brief outline
Green = mark scheme
Impact of globalisation
Discuss the impact of globalisation on UK economy (25)
- Structural unemployment and multiplier effects
- Affects balance of payments
To what extent do the costs of globalisation outweigh the benefits? (25)
Evaluate the extent to which globalisation inevitably leads to a rise in income and wealth inequality in one or more
countries of your choice (25)
In the early 1970s, the US, Germany and Japan accounted for over 1/3 of world trade, but by the 1990s, global trade had
become more diversified. By 2012, China was the world’s second largest trading country after the US. Assess the factors
that may cause changes in a country’s pattern of trade with other countries (25)
Assess the view that the main cause of globalisation is the increased significance of TNCs (25)
Evaluate the view that free trade is the best form for economic growth and macroeconomic performance (25)
Evaluate the view that protectionism is the best form for economic growth and macroeconomic performance (25)
Evaluate the view that free trade is better for macroeconomic performance than protectionism (25)
Comparative advantages? (assumptions?)
Trading blocs:
Assess the economic effects of the growth of trading blocs on the global economy (25)
The Trans-Pacific Partnership (TPP), a giant new trading bloc of 12 countries, including the US, Canada, Australia, Japan,
Peru, Malaysia and Vietnam is likely to be established in 2015. Examine the potential benefits of membership of such a
trading bloc (25)
Assess the extent to which the WTO has encouraged globalisation (25)
Examine how a free trade area might stimulate economic growth (in Sub-Saharan Africa) (25)
Developing nations:
Evaluate the argument that globalisation has been of much greater benefit to consumers in advanced countries rather than
consumers in developing nations (25)
Evaluate whether the receipt of remittances benefits developing economies (25)
Evaluate the view that trading blocs have been a major constraint on economic development in developing economies (25)
Assess the effect of globalisation on inequality in the world economy (25)
Evaluate the extent to which countries benefit from international trade (even though they may produce the similar goods)
(25)
With reference to examples of specific countries, evaluate the possible benefits of inflows of overseas aid to promote
economic development (25)
Examine the importance of trade for economic growth in a developing country of your choice (25)
In 2014 gross savings as a proportion of GDP were 47% in Singapore but only 16% in Brazil and 10% in Kenya. Assess
whether a low savings ratio is the most significant constraint on economic growth in developing countries. (25)
With reference to examples of specific developing countries, evaluate the potential benefits of inward FDI (25)
To what extent is primary product dependency a constraint on economic growth and development in developing
countries? (25)
Evaluate 4 ways in which economic growth and development might be promoted in developing countries (25)
Eurozone:
Discuss the likely macroeconomic effects on the UK leaving the EU customs union (25)
Evaluate the economic effects of a decision by the UK government to exit the EU (25)
Evaluate the view that membership of a customs union has more advantages than disadvantages for an economy (25)
The UK is a member of the EU but has not adopted the euro as its currency. To what extent do the benefits of membership
of a monetary union such as the Eurozone outweigh the costs (25)
Definitions
Globalisation: Process of deeper integration and interdependence between countries evidenced by rising trade to GDP
ratios, cross border capital flows and labour migration from one nation to another
Income and wealth inequality: Can be measured using the Gini coefficient.
Assumptions behind the standard theory of comparative advantage, specialisation and trade
, 1) Constant returns to scale i.e. no economies of scale – may amplify (increase) gains from trade
2) Factor mobility between industries (geographical and occupational) – workers are assumed to be equally
productive in whatever industry/ job they do and switch work easily
3) No trade barriers like import tariffs and quotas and other trade frictions (non-tariff barriers)
4) Low transportation costs to get products to market – high logistics cost may erode any comparative advantage
between nations
5) No externalities from production/ consumption
Intra-regional trade
- Share has grown 10% between 1990 and 2011
- Due to a fall in the share of North America in total Asian trade
- Many Asian countries have achieved fast progress towards a highly diversified industrial base
- Increasing capacities and competencies in producing many different goods and services has accelerated intra-
industry trade e.g. as countries supply different components
- Asia is building complex and large supply chains and trading more within the region as a result
TNCs from emerging countries
- TNCs from emerging market countries now account for 30% of the global Fortune 500 (in 2018) compared to only
7% in 2005
- According to Forbes, by 2022, emerging market countries will account for over 80% of the global population and
40% of global GDP
o China Mobile is in the top 10 consumer brands in the world
o Alibaba has expanded to be the biggest global online retailers
o Tata Group conglomerate from India has made significant investments in Western economies e.g.
Jaguar Land Rover
Assess the view that the main cause of globalisation is the increased significance of TNCs (25)
Intro:
Globalisation: Globalisation is a process of deeper integration and interdependence between countries evidenced by rising
trade to GDP ratios, cross border capital flows and labour migration.
TNCs: base their manufacturing, assembly, research and retail operations in numerous countries. Companies like Apple,
Walmart and Google have become synonymous with globalisation, with Google having offices in more than 60 countries
and the. Leading 500 TNCs account for 70% of world trade.
Increased significance of TNCs as a major cause of globalisation
- Growth of offshoring and outsourcing by TNCS resulting from:
o Reduction in transport costs
o Reduction in communication costs
o Low labour costs
o Regulations (health & safety and environmental) – less stringent than in developed economies
o Capital market liberalisation
Point 1:
P: TNCs are a key driver as they outsource jobs due to relatively lower unit labour costs to increase their total profits and
returns for shareholders.
Ev: VW, Toyota and Nissan all have bases in Mexico which has helped to build a comparative advantage in manufacturing
and then exporting vehicles within the USMCA agreement with the US, Mexico and Canada
D: Increased FDI and profit
Yellow = online plan
Blue = brief outline
Green = mark scheme
Impact of globalisation
Discuss the impact of globalisation on UK economy (25)
- Structural unemployment and multiplier effects
- Affects balance of payments
To what extent do the costs of globalisation outweigh the benefits? (25)
Evaluate the extent to which globalisation inevitably leads to a rise in income and wealth inequality in one or more
countries of your choice (25)
In the early 1970s, the US, Germany and Japan accounted for over 1/3 of world trade, but by the 1990s, global trade had
become more diversified. By 2012, China was the world’s second largest trading country after the US. Assess the factors
that may cause changes in a country’s pattern of trade with other countries (25)
Assess the view that the main cause of globalisation is the increased significance of TNCs (25)
Evaluate the view that free trade is the best form for economic growth and macroeconomic performance (25)
Evaluate the view that protectionism is the best form for economic growth and macroeconomic performance (25)
Evaluate the view that free trade is better for macroeconomic performance than protectionism (25)
Comparative advantages? (assumptions?)
Trading blocs:
Assess the economic effects of the growth of trading blocs on the global economy (25)
The Trans-Pacific Partnership (TPP), a giant new trading bloc of 12 countries, including the US, Canada, Australia, Japan,
Peru, Malaysia and Vietnam is likely to be established in 2015. Examine the potential benefits of membership of such a
trading bloc (25)
Assess the extent to which the WTO has encouraged globalisation (25)
Examine how a free trade area might stimulate economic growth (in Sub-Saharan Africa) (25)
Developing nations:
Evaluate the argument that globalisation has been of much greater benefit to consumers in advanced countries rather than
consumers in developing nations (25)
Evaluate whether the receipt of remittances benefits developing economies (25)
Evaluate the view that trading blocs have been a major constraint on economic development in developing economies (25)
Assess the effect of globalisation on inequality in the world economy (25)
Evaluate the extent to which countries benefit from international trade (even though they may produce the similar goods)
(25)
With reference to examples of specific countries, evaluate the possible benefits of inflows of overseas aid to promote
economic development (25)
Examine the importance of trade for economic growth in a developing country of your choice (25)
In 2014 gross savings as a proportion of GDP were 47% in Singapore but only 16% in Brazil and 10% in Kenya. Assess
whether a low savings ratio is the most significant constraint on economic growth in developing countries. (25)
With reference to examples of specific developing countries, evaluate the potential benefits of inward FDI (25)
To what extent is primary product dependency a constraint on economic growth and development in developing
countries? (25)
Evaluate 4 ways in which economic growth and development might be promoted in developing countries (25)
Eurozone:
Discuss the likely macroeconomic effects on the UK leaving the EU customs union (25)
Evaluate the economic effects of a decision by the UK government to exit the EU (25)
Evaluate the view that membership of a customs union has more advantages than disadvantages for an economy (25)
The UK is a member of the EU but has not adopted the euro as its currency. To what extent do the benefits of membership
of a monetary union such as the Eurozone outweigh the costs (25)
Definitions
Globalisation: Process of deeper integration and interdependence between countries evidenced by rising trade to GDP
ratios, cross border capital flows and labour migration from one nation to another
Income and wealth inequality: Can be measured using the Gini coefficient.
Assumptions behind the standard theory of comparative advantage, specialisation and trade
, 1) Constant returns to scale i.e. no economies of scale – may amplify (increase) gains from trade
2) Factor mobility between industries (geographical and occupational) – workers are assumed to be equally
productive in whatever industry/ job they do and switch work easily
3) No trade barriers like import tariffs and quotas and other trade frictions (non-tariff barriers)
4) Low transportation costs to get products to market – high logistics cost may erode any comparative advantage
between nations
5) No externalities from production/ consumption
Intra-regional trade
- Share has grown 10% between 1990 and 2011
- Due to a fall in the share of North America in total Asian trade
- Many Asian countries have achieved fast progress towards a highly diversified industrial base
- Increasing capacities and competencies in producing many different goods and services has accelerated intra-
industry trade e.g. as countries supply different components
- Asia is building complex and large supply chains and trading more within the region as a result
TNCs from emerging countries
- TNCs from emerging market countries now account for 30% of the global Fortune 500 (in 2018) compared to only
7% in 2005
- According to Forbes, by 2022, emerging market countries will account for over 80% of the global population and
40% of global GDP
o China Mobile is in the top 10 consumer brands in the world
o Alibaba has expanded to be the biggest global online retailers
o Tata Group conglomerate from India has made significant investments in Western economies e.g.
Jaguar Land Rover
Assess the view that the main cause of globalisation is the increased significance of TNCs (25)
Intro:
Globalisation: Globalisation is a process of deeper integration and interdependence between countries evidenced by rising
trade to GDP ratios, cross border capital flows and labour migration.
TNCs: base their manufacturing, assembly, research and retail operations in numerous countries. Companies like Apple,
Walmart and Google have become synonymous with globalisation, with Google having offices in more than 60 countries
and the. Leading 500 TNCs account for 70% of world trade.
Increased significance of TNCs as a major cause of globalisation
- Growth of offshoring and outsourcing by TNCS resulting from:
o Reduction in transport costs
o Reduction in communication costs
o Low labour costs
o Regulations (health & safety and environmental) – less stringent than in developed economies
o Capital market liberalisation
Point 1:
P: TNCs are a key driver as they outsource jobs due to relatively lower unit labour costs to increase their total profits and
returns for shareholders.
Ev: VW, Toyota and Nissan all have bases in Mexico which has helped to build a comparative advantage in manufacturing
and then exporting vehicles within the USMCA agreement with the US, Mexico and Canada
D: Increased FDI and profit
