Globalisation

Created by: Ayomide
Created on: 24-02-13 00:54


	Globalisation
	Advantages Higher Profits for MNC's e.g. due to lower costs by employing cheaper labour. Income from FDI for developed countries where MNCs are based. In addition they provide jobs. MNC's being able to produce goods cheaply could result in lower prices Increase in quantity of labour as workers are able to move freely between countries e.g. EU legislation Less conflict - More trading internationally could reduce war Extra output and unemployment from FDI will mean increased economic growth for developed countries Developed countries gain more tax revenue as they tax MNCs Free trade is encouraged by globalisation and so all countries benefit FDI allows countries to increase exports, as the output sold by the MNC in their is counted as an export for their country. Globalisation creates employment, especially for developing countries, from MNCs using FDI. It means usually that developing countries are introduced to new technology and modern working practices through MNCs. Workers in developing countries learn new skills as a result of training and on-the-job learning when employed by MNCs.	Disadvantages Globalisation usually results in global economic growth which usually means more environmental damage. E.g. more cars are bought. Less developed countries could be exploited: Globalisation could encourage developing countries to produce in the primary sector, which restricts growth as their income elasticity of demand is low. Also the prices of primary products fluctuate frequently, meaning the country's income is never constant. MNCs pay low wages and may employ child labour. Poor conditions. Resources are extracted and sold with little money going to country. Tax gained by country is minimal Globalisation involves interdependence This means if the economy of one country fails, the economies of others will suffer. E.G Germany in 1929 after America's wall street crash. Developed countries benefit more from globalisation as they have the resources to exploit the forces of globalisation.
	Evaluation Globalisation is better for the global economy however it is likely that developed countries are likely to benefit more from it than developing countries.

Globalisation

Advantages

Higher Profits for MNC's e.g. due to lower costs by employing cheaper labour.
Income from FDI for developed countries where MNCs are based. In addition they provide jobs.
MNC's being able to produce goods cheaply could result in lower prices
Increase in quantity of labour as workers are able to move freely between countries e.g. EU legislation
Less conflict - More trading internationally could reduce war
Extra output and unemployment from FDI will mean increased economic growth for developed countries
Developed countries gain more tax revenue as they tax MNCs
Free trade is encouraged by globalisation and so all countries benefit
FDI allows countries to increase exports, as the output sold by the MNC in their is counted as an export for their country.
Globalisation creates employment, especially for developing countries, from MNCs using FDI.
It means usually that developing countries are introduced to new technology and modern working practices through MNCs.
Workers in developing countries learn new skills as a result of training and on-the-job learning when employed by MNCs.

Disadvantages

Globalisation usually results in global economic growth which usually means more environmental damage. E.g. more cars are bought.
Less developed countries could be exploited:
Globalisation could encourage developing countries to produce in the primary sector, which restricts growth as their income elasticity of demand is low. Also the prices of primary products fluctuate frequently, meaning the country's income is never constant.
MNCs pay low wages and may employ child labour. Poor conditions.
Resources are extracted and sold with little money going to country.
Tax gained by country is minimal
Globalisation involves interdependence This means if the economy of one country fails, the economies of others will suffer. E.G Germany in 1929 after America's wall street crash.
Developed countries benefit more from globalisation as they have the resources to exploit the forces of globalisation.

Evaluation

Globalisation is better for the global economy however it is likely that developed countries are likely to benefit more from it than developing countries.

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Globalisation

Globalisation

Advantages

Disadvantages

Evaluation

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