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Essay Plans Unit 4 ECON4 - Economics: The International Economy £5.96   Add to cart

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Essay Plans Unit 4 ECON4 - Economics: The International Economy

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Essay plans on the international economy.

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  • August 7, 2024
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The international economy essay plans



Globalisation

45. Explain the term ‘globalisation’ and the role that multinational
companies play in the development of globalisation. (15)

 Globalisation = the integration of markets within the world economy
which increases the interconnectedness of national economies
 MNCs = organisations which own or control the production of goods
and services in multiple countries
 Increases international trade which brings countries together
 The greater openness allows development of a country’s
comparative advantage which is greater when there is greater
freedom from protectionist policies
 They use marketing to become global
 By growing they have been able to take advantage of economies of
scale especially risk bearing economies of scale
 They lower costs of production through the spread of technological
knowledge and economies of scale
 MNCs find labour to be cheaper abroad so move production abroad
o Economies remain highly interconnected in order to smoothly
import and export goods produced between different sates of
the production line which often happen in different countries
o Represents flow of physical goods such as raw materials,
energy, food, parts and consumption goods between countries
 This causes developed countries to trade with developing countries
so they cam access the same manufactured goods
 Comment economies through flows of information and cause other
countries to innovate through the new information they can build
upon to lower costs
 Different operating centres in different nations
 Increases migration
 More countries participate in global trade
 Higher levels of FDI injected into host economy
 Examples of MNC – amazon, Starbucks
 AD/ AS diagram
o Shift right in supply
o Multiplier effect shift twice right in demand

, To what extent, if at all, have the economic consequences of globalisation
differed between developed and developing countries? (25)

Shared effects

 Lower prices
 Choice competition
 Knowledge sharing
 Financial flows and investment
 Allocative efficiency
 Specialisation
 Comparative advantage
 Unemployment
 Systemic risk

Developed

 Deindustrialisation
 Structural unemployment
 Profits from MNCs
 Strong currency so cheap imports
 Depend more on imported goods
 MNCs and TNCs are more present in developed countries
o Amazon, apple, google
 Depends on country
o USA and UK
o China – good example

Developing

 Race to the bottom
 Exploitation
 Primary product dependency
 Over exploitation of resources
 Benefit from investment
 Financial flows
 Knowledge sharing
 MNCs use developing countries for labour
 Depends on country
o Vietnam – good example – transitioned to a socialist
orientated market economy and successfully attracted inward
FDI from companies like LG and Samsung

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