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Effects of globalisation, The conclusion for globalisation questions…

- - - - wider variety
        
        increase cr welfare
      - greater movement of g+s allows them to enjoy cheaper g+s
    - - vulnerable to global recession or imported inflation
      - vulnerable to predatory pricing
  - - - strong competition from foreign producers
        
        competed out and forced to close down
    - - sell more to international mkts
        
        increase revenue
        
        also allows them to expand
        
        reap EOS
      - global competition
        
        enourage them to innovate, and seek to be cost efficient
  - - - collect more tax revenue as X sales increase
      - rise in nmt rates (as more dd for X)
      - less likelihood of dom monopoly
    - - deal with protectionist measures
      - implement macroeconomic policies to deal with global economic slowdown
      - increase structural unnmt due to FDI
        
        only in the SR as countries find new CA
      - increase Y inequality (because of increase dd for skilled labour)
        
        income gap results
      - increase cost push/dd pull inflation
        
        increase FDI --> increase AD
        
        increase px of FOP --> cost push inflation
      - decrease EG
        
        outward I could decrease dom I
        
        decrease dom I decrease growth of LRAS
      - environmental degration
- - - - cost advantage
        
        lower COP --> higher returns
      - achieve EG
        
        increase X of capital
        
        thus icnrease AD
        
        AEG occurs
    - - structural unnmt
      - widening income disparity
        
        lower income workers are no longer needed for thier lower skills
  - - - higher FDI
        
        higher AEG and PEG
      - cost
        
        FDI wont matter if the import content is high
        
        investment by the developed nations are labour intensitve --> does not do much to help tehcnology
        
        stifle homegrown efforts
        
        environemental degration (esp in less developed countries)
        
        decrease SOL
        
        low safety standards and poor working condiitons
- - - - increase EG
        
        increase qty anf qly of labour
      - increase nmt (dun understand why)
    - - decrease EG
        
        cheaper labour
        
        firms unlikely to use better technologies
      - Widening income gap
        
        influx of high and low skilled labour
      - lower skilled labour faces unnmt
  - - - -
        
        improve trade balance
        
        more locals going overseas to work
        
        consitutes net income flows
        
        increase pp of hh
        
        increase I
        
        lower unnmt
        
        smaller labour force
        smaller unnmt rate
    - - lower EG
        brain drain
        
        lower potential EG
        
        fewer residents
        
        decrease I
        
        decrease AEG