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What is meant by the phrase 'Globalisation'?

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Introduction

GOLBALISATION 1. What is meant by the phrase 'Globalisation'? With reference to appendix 1, explain why this makes domestic economic management more difficult. (8 marks) Globalisation is difficult to define; it is the development of the world into just one market i.e. a global market. Quite simply businesses have moved from producing and selling their goods in just their national markets, to producing and selling their goods and services all over the world. It is bringing the world closer to Homogenization. Therefore they are spread across international boundaries. It is firms using the world as one giant market, with the possibility of having parts of production in different countries, leading to the fragmentation of production, whereby materials and components are sourced from different countries. ...read more.

Middle

The internet has played a role in the spread of this globalisation. 2. Apart from your answer above, evaluate other impacts of 'globalisation' on the UK. Globalisation has led to a significant growth of competition. This has forced domestic firms in the UK to themselves become more efficient in terms of being more innovative and developing new products (Dynamic Efficiency), lowering costs (Productive Efficiency) and giving customers what they wont (Allocative Efficiency-all improving the standard of living). This has been highly significant, illustrated by the so-called China effect where the U.K. (and the world) has benefited from lower inflation because of more competitive pressures exerted by China on the global market. ...read more.

Conclusion

Multinationals are seeing the global market as their area of operation, spreading out from the constraints of the domestic market. This has proven highly significant for those countries that have attracted a lot of multinational investment, such as the UK. However some trans-national firms, such as Ford in the U.K. could be said to have a high degree of political power of pressure and influence than the democratically-elected the governments as they have a large number of employees and are an important part of the economy. The significance of this expansion of production, has encouraged the development of 'global brands'. It is these global brands which have often caused controversy as they are blamed for eroding domestic culture and forcing out domestic brands form the market. DAVID KILGANNON ...read more.

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