The Global Economy
- 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
- Grants
- Globlisation
- Faster world wide economic growth
- Multinationals expand market (Samsung)
- Faster world wide economic growth
- 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
- Impacts on the natural enviroment
- The developement gap
- Foreign Direct Investments
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