100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
A-Level Edexcel Economics A Unit 4 Summary Notes with Diagrams £12.49   Add to cart

Summary

A-Level Edexcel Economics A Unit 4 Summary Notes with Diagrams

 11 views  0 purchase

Full, detailed summary notes on every topic in Unit 2 for Pearson Edexcel Economics A. Includes detailed summary notes and diagrams and can be used for A-Level Revision

Preview 4 out of 81  pages

  • September 2, 2024
  • 81
  • 2023/2024
  • Summary
All documents for this subject (124)
avatar-seller
prashonpendyala1
Globalisation 4.1.1
Created @October 30, 2023 6:13 PM

Tags

Globalisation is a process in which national economics have become increasingly
integrated and inter-dependent
KOF’s index of Globalisation ranks countries based on three key dimensions:

1. Economic

2. Social

3. Political


Key Drivers of Globalisation:
1. Less protectionist policies and Free Trade

a. Borders are more open and average import tariff has fallen

2. Containerisation

a. Cost of ocean shipping has come down, due to the invention of
containers, bulk shipping and other efficiencies

3. Technological change

a. Cost reduction of transmitting and communicating information

4. Economies of Scale

a. Increase in minimum efficient scale (MES) associated with some industries

5. Differences in tax systems

a. Countries have adjusted their tax systems to attract foreign direct
investment (FDI)


Positive Impacts of Globalisation:
Increased international trade flows



Globalisation 4.1.1 1

, Increased economic growth

Increased FDI

Rising number of global brands

Increased specialisation and division of labour

Global supply chains and new trade investment routes

Increased international migration

Increased connectivity between firms and people


Disadvantages of Globalisation:
Rising inequality/Relative poverty

Threats to global commons (ecosystems, oceans etc.)

Macroeconomic fragility due to inter-connectedness

Trade imbalances create inequality between countries

Higher structural employment

Dominant global brands

MNCs may conduct poor behaviour


Impacts of Globalisation:
Consumers:
Consumer choices increase

Lower prices from global markets —> More disposable income to spend on
other goods —> Standard of living gets better




Globalisation 4.1.1 2

, Domestic industries (small/infant) cannot compete with low prices

Leads to greater unemployment

Firms:
Market size increases so sales increase

Specialisation (due to comparative advantage) lets firms exploit economies of
scale so opportunity cost decreases

Supplier network increases, access to lower prices, COP decreases, profit
increases

Access to modern technologies, COP decreases as productivity increases

Risk diversification by operating and selling in different countries

Tax avoidance

Transfer pricing - setting prices for goods and services that are
transferred between different parts of a multinational company

However, economic dependency increases, so risk increases if trade links
break down

Workers:



Globalisation 4.1.1 3

, Employment opportunities increase

Migration increases

Skill gaps decrease so productivity increases

Workers standard of living increases

More jobs created in host country

However:

Structural unemployment in traditional manufacturing (due to mismatch of
skills) increases

Migration increases so there is more pressure on housing, education and
healthcare

Wages decrease due to increase in supply of labour

Governments:
More government co-operation

FDI increases

However:

Possible tax evasion/aversion by MNCs

Inequality increases

Negative externalities increase

Individual Countries:
Specialisation in their comparative advantage

Total output increases leading to economic growth

National income increase leading to increase in Standard of Living

FDI increases

MNCs invest in developing countries improving their infrastructure

However:




Globalisation 4.1.1 4

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller prashonpendyala1. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £12.49. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

83637 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£12.49
  • (0)
  Add to cart