Section A: Key terms and recall
Define the term 'globalisation'.
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Globalisation is the increasing interdependence of the world's economies, cultures, and populations, brought about by cross-border trade in goods and services, technology, and the flow of capital and labour. [2 marks]
Identify two causes of changes in globalisation.
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Two causes of changes in globalisation could be: - Advances in technology and communication. - Reductions in trade barriers and restrictions. [2 marks]
What is a multinational company (MNC)?
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A multinational company (MNC) is a business that operates and has assets in at least one country other than its home country. [1 mark]
Name two types of trade restrictions.
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Two types of trade restrictions are: - Tariffs (import duties). - Import quotas. [2 marks]
Give one reason why countries might impose trade restrictions.
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One reason for trade restrictions could be to protect domestic industries from foreign competition. [1 mark]
Section B: Applying your knowledge
A country decides to impose a 20% tariff on imported cars. What might be the impact on domestic car manufacturers? Explain your answer.
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The impact on domestic car manufacturers could be positive, as the tariff would make imported cars more expensive, making domestic cars more competitive. This could lead to increased sales and profits for domestic manufacturers. [2 marks]
A multinational company (MNC) sets up a factory in a developing country. What might be the benefits for the developing country?
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Benefits for the developing country could include: - Job creation and increased employment opportunities. - Technology transfer and skills development. - Increased foreign investment and economic growth. [3 marks]
A country imposes an import quota on textiles. What might be the consequences for consumers in that country?
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Consequences for consumers could include: - Higher prices for textiles, as the supply of imported textiles is restricted. - Reduced choice and variety of textiles available in the market. [2 marks]
A country decides to remove all trade restrictions on agricultural products. What might be the impact on domestic farmers? Explain your answer.
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The impact on domestic farmers could be negative, as they would face increased competition from imported agricultural products. This could lead to lower prices for domestic agricultural products and reduced profits for domestic farmers. [2 marks]
A multinational company (MNC) decides to outsource its customer service operations to a country with lower labour costs. What might be the benefits for the MNC?
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Benefits for the MNC could include: - Lower labour costs, leading to increased profits. - Improved customer service, as the MNC can provide 24/7 support by taking advantage of time zone differences. [2 marks]
Section C: Explain and analyse
Explain the consequences of globalisation for a developing country. Your answer should include both positive and negative consequences.
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Consequences of globalisation for a developing country could include: - Positive consequences: * Increased foreign investment and economic growth. * Technology transfer and skills development. * Job creation and increased employment opportunities. - Negative consequences: * Increased competition for domestic industries, leading to job losses and reduced profits. * Cultural homogenisation and loss of traditional values and practices. [4 marks]
Analyse the reasons for and against trade restrictions. Your answer should include at least two reasons for and two reasons against trade restrictions.
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Reasons for trade restrictions could include: - To protect domestic industries from foreign competition. - To safeguard national security by ensuring self-sufficiency in key industries. Reasons against trade restrictions could include: - To promote free trade and increase economic efficiency. - To comply with international trade agreements and avoid retaliatory measures. [4 marks]
A country decides to impose a 10% tariff on all imported goods. Using a table, calculate the new price of the following imported goods, assuming the original price includes the cost of importation but not the tariff.
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The new price of the imported goods, including the 10% tariff, would be: | Product | Original Price (£) | Tariff (10%) (£) | New Price (£) | |---------|-------------------|------------------|--------------| | Smartphone | 500 | 50 | 550 | Laptop | 1000 | 100 | 1100 | Television | 800 | 80 | 880 [3 marks]
Challenge
A country decides to join a regional trade agreement, which requires it to remove all trade restrictions on goods and services with other member countries. Using a mind map, analyse the potential impacts of this decision on the country's economy, society, and environment. Your mind map should include at least three branches, each with at least two sub-branches.
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A possible mind map could look like this: Mind Map Root: Impacts of joining a regional trade agreement Branches: * Economic impacts: - Increased trade and economic growth. - Job creation and increased employment opportunities. * Social impacts: - Cultural exchange and increased understanding between countries. - Increased competition for domestic industries, leading to job losses and reduced profits. * Environmental impacts: - Increased production and consumption, leading to increased pollution and resource depletion. - Technology transfer and improved environmental standards. [6 marks]