4.3.1 What are the causes and effects of globalisation? Part I

Detailed notes following the requirements of the specification. This is just Part I which focuses on the causes of gobalisation. I have taken the information from a mixture of resources, including the Edexcel A2 Economics textbook by Peter Smith, the Tutor2U site and my own knowledge

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4.3.1 what are the causes and effects of

What is globalisation?

Ann Krueger, the first deputy-managing director of the IMF, defined globalization as `a
phenomenon by which economic agents in any give part of the world are much more
affected by events elsewhere in the world'

Globalisation refers to…

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to a firm, increasing the amount of consumers that are able to purchase the goods and
services produced by a firm and to lower the costs of distribution and production.


I. Improvements in transportation has enabled firms to fragment their production
processes to take advantage of varying cost condition…

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Reduction of trade barriers

Since the Second World War, there has been successive reduction on trade barreris, first
under the auspices of the General Agreement on Tariffs and Trade (GATT), and later under
the World Trade Organisation (WTO) which replaced the GATT.

Additionally, there has been a trend towards the…

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Hand in hand with developments being made by organisations such as the World Trade
Organisation, there have also been movements made towards removing restrictions on the
movement of financial capital between countries. Add to the fact that most countries have
removed capital controls, operating globally has been made easier.



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