The Global Economy

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  • Created by: Alexia10
  • Created on: 27-11-14 10:57
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  • The Global economy
    • Foreign Direct Investments
      • Construct factorys and develope mines and tea plantation
      • Invest in shares
      • Works with companies in host nations
      • Governments and FDI
        • Tax breaks, subsides, grants and loans
        • Relax regulation
        • Invest in infrastucture (roads,railways)
        • Invest in education so people can get jobs with foreign companies
    • Development aid
      • Long term developement of a nation
      • Types
        • Grants
          • For specific projects (schools)
        • Loans
          • No interest/ low interest
        • Tied aid
    • Globlisation
      • Faster world wide economic growth
        • Multinationals expand market (Samsung)
    • Benefits to multinationals (6)
      • Higher profits for multinationals
      • Higher income and employment
      • Low costs for westenres
      • Increase in quantity of labour
      • Greater consumer choice
      • Less conflict
    • Benefits to LEDC (7)
      • Increase in income
      • Increase in tax revenue
      • Increase in exports
      • Increase in employment
      • Transfer of technology
      • Improvement of human capital
      • Enterprise development
        • New buissness being created in LEDCs
    • Disadvantages
      • Impacts on the natural enviroment
        • More pollution
        • Using non-renewable resources
      • Exploitation of LEDC
        • Multinationals often pay low wages
        • Rsources are taken. Multinationals gain a lot; host country gain a little.
      • Higher commodity prices ( wheat, riice) LEDCs less able to afford
      • Interdependence
        • When one country does poorly another will be affected
    • The developement gap

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