DAVID KILGANNON
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. This has lead to increasing ‘interdependence’, where a countries economic performance can affect other countries that may be using that country for a part of production, or service. For example if the E.U. ( a major market for Chinese manufactures ) went into recession, then it could impact on the Chinese economy, and could also impact on other economies (or the whole world) that may be supplying China with raw materials and components. In short, the fortunes of countries are becoming more closely linked to each other, making it more difficult for domestic governments to control their own economies. The internet has played a role in the spread of this globalisation.
