Indicators of Globalisation (Chapter 1)
When you define globalisation always include the indicators- trade, investment, finance, labour and technology.
International Trade Flows
1) Describe how international trade has increased. Explain how TNCs have played a role in this growth. How have
international trade agreements increased trade within regions?
2) Has the composition of trade changed? How is the direction of trade changing? Why is this occurring? Explain
how changes in trade flows can impact on individual economies.
International Finance
1) International Finance is the movement of money between countries as people purchase shares, foreign
currency, government securities or save overseas. Why has international finance grown so rapidly during the
globalisation era?
2) What is a FOREX market? What role do FOREX markets play in the global economy? Who are the main
participants in FOREX markets? Why are speculators so powerful in FOREX markets? Discuss what is meant by
“herd mentality”. What is the role of the IMF?
International Investment
1) The term investment is used in several different ways in economics. When we looked at the circular flow of
income investment was money borrowed from the financial sector to purchase capital goods. When we talk
about Foreign Direct Investment (FDI) we are talking about foreign money coming into a country to establish a
new business or takeover an existing business.
Why has FDI increased over the last 20 years? Why does most FDI occur in developed countries?
Explain why developing countries like China and Vietnam are attracting FDI. What role do TNCs play in
international investment flows?
International Labour
1) Why are labour markets less international than goods, finance and investment markets? Explain how the
Singapore labour market benefits from the internationalisation of the labour market? Does Australia suffer from
a brain drain? Is Mr Rodger an example of Australia’s brain drain problem? Outline the restrictions to the
globalisation of labour markets.
Technology
1) Discuss the role of technology in the globalisation of trade, finance, investment and labour.
International Business Cycle
1) What is the international business cycle? Does this mean that each country experiences the same economic
cycles? Explain how economic conditions in one country can have an impact on other countries. This is exactly
the problem at the moment- the financial crisis in the USA is having an impact on the rest of the world.
How do countries maintain a degree of control over their own business cycles?