Lower trade barriers, Increased trade from specialising in comparative advantage, higher world output means increased S.O.L
1 of 12
EoS (+)
Firms specialising will increase output, so will gain from falling Long run average costs due to Eos
2 of 12
Choice (+)
Decreased trade barriers means countries can import at a lower price, so firms will export goods they couldn't otherwise export, so greater choice
3 of 12
Reduction in Poverty (+)
Developing countries become more integrated in the world economy, increase in real GDP of those countries, reduces number of people in absolute poverty
4 of 12
Tax (+)
GDP increasing means an increase in NY, increase in NY means higher tax revenue being received by the government, can spend this on health, education, infrastructure
5 of 12
Technology (+)
TNC's investing in other countries, likely to bring modern technology to that country, domestic firms can use this to increase communication and productivity
6 of 12
Negative Externalities (-)
Increased production due to increased trade means that pollution will increase, transporting goods large distances also creates pollution
7 of 12
Over-Dependence (-)
A country that doesn't have a comparative advantage will have to rely on imports in order to fulfill demand, worsening the BOP perhaps causing a defecit
8 of 12
Inequality (-)
as TNC's invest in overseas countries and their economy develops, the demand for unskilled labour decreases. lack of human capital means the untrained/uneducated will struggle for employment, decreasing their Y so increasing inequality
9 of 12
Exploiting Labour (-)
TNC's will exploit labour in countries with low labour market regulations in order to reduce their costs, local population have no choice so they accept the low wages
10 of 12
Exploiting resources (-)
some countries invest heavily in developing countries that are rich in natural resources to secure future supplies, receiving country will gain revenue but may have lost some of the long run value
11 of 12
Contagion (-)
increased economic integration of countries globally means that economic downfalls in one country will have adverse effects on countries that they trade with
12 of 12
Other cards in this set
Card 2
Front
EoS (+)
Back
Firms specialising will increase output, so will gain from falling Long run average costs due to Eos
Comments
No comments have yet been made