Cover lesson review

What is trade liberalisation?

• Increasing taxes on international trade

• The process of establishing trade barriers

• The process by which international trade is made easier through a relaxation of the rules

• Reducing the quality of goods traded internationally

What role does the World Trade Organisation (WTO) play in globalisation?

• Increases barriers to trade

• Provides a forum for the negotiation of trade disputes and encourages trade liberalisation

• Prohibits international trade

• Focuses only on domestic trade

How has political change contributed to globalisation?

• By discouraging international cooperation

• Through more open trade between nations due to less protectionist policies

• By increasing protectionist policies

• By limiting international summits

What is the impact of reduced cost of transport and communication on business?

• Decreases the efficiency of international trade

• Makes it harder to access international markets

• Increases the cost of doing business internationally

• Allows businesses to produce goods overseas and still be competitive

What is the significance of transnational companies in globalisation?

• They discourage investment in technology and product innovation

• They use cheap labour in LEDCs to mass produce goods for a global market

• They reduce global economic activity

• They only operate within their country of origin

What is Foreign Direct Investment (FDI)?

• A controlling ownership in a business enterprise in one country by an entity based in another country

• A tax imposed on international trade

• A local investment in domestic businesses

• A strategy to reduce international business operations

How does migration contribute to globalisation?

• By restricting movements of people between nations

• Through stricter immigration policies

• By providing a source of low-income workers for the host nation

• By decreasing the diversity of the workforce

What is structural change in the context of globalisation?

• A temporary shift in an economy's sector emphasis

• A long-term shift in the fundamental structure of an economy, often linked to growth and economic development

• A decrease in economic activities

• A focus on maintaining traditional economic sectors

What benefits can result from trade liberalisation according to the OECD?

• Decrease in jobs and lower real wages

• Increase in trade barriers and decrease in exports

• Economic stagnation and reduced international cooperation

• Rise in jobs for lower-skilled and higher-skilled workers, increase in real wages, and boost in exports

Why might a government offer incentives for FDI?

• To limit job creation

• To increase foreign investment and improve the investment climate

• To decrease the country's GDP

• To discourage international business relations