HSC Economics — Topic 1
Globalisation — Flashcards & Quiz
Globalisation is the increasing integration of economies through trade, finance, investment, technology and labour mobility, and it underpins HSC Economics Topic 1: Global Economy. You need to discuss the indicators (trade as a share of GDP, FDI flows, growth in MNCs), the drivers (technology, deregulation, trade liberalisation), and the uneven distributional effects on developed and developing economies. Top responses use named contemporary examples — China's rise, supply-chain reshoring, services trade growth — rather than abstract theory.
Key Points
- Globalisation = increasing integration of economies through trade, finance, investment, technology and labour mobility.
- Measured by: trade as a share of GDP, foreign direct investment (FDI) flows, multinational corporation (MNC) operations, migration flows.
- Drivers: trade liberalisation (WTO, FTAs), technology (containerisation, digital platforms), deregulation, falling transport costs.
- Uneven impact: some countries and workers gain (export-oriented growth, cheaper consumer goods); others lose (manufacturing job losses, wage pressure).
- Recent shifts: post-COVID supply chain reshoring, US-China trade tensions, services trade growth, digital protectionism.
- HSC evaluation: discuss both efficiency gains and distributional concerns — named contemporary examples score higher than abstract theory.
Common Mistakes to Avoid
- Confusing globalisation (a process) with free trade (an outcome).
- Claiming globalisation benefits everyone — it has winners and losers; distributional effects matter.
- Listing generic benefits without naming specific examples (China's rise, supply chains, multinational operations).
- Forgetting technology and migration as drivers — globalisation is more than just trade.
- Ignoring the recent backlash — post-COVID reshoring, US-China tensions, digital protectionism.
Exam Strategy
HSC Topic 1 globalisation questions are evaluative. Structure: (1) define globalisation and name its dimensions (trade, finance, investment, labour, technology), (2) discuss benefits and costs with named examples, (3) evaluate distributional effects across countries and groups, (4) conclude with a balanced judgement. Contemporary examples (post-COVID, US-China) score higher than textbook references.
Sample Flashcards
Q1: What is globalisation and what are its main causes?
Globalisation is the increasing integration and interdependence of national economies through trade, investment, technology, and migration. Main causes include advances in transport technology (containerisation, air freight), information and communication technology (internet, mobile), reduction in trade barriers (WTO, FTAs), and growth of multinational corporations. Financial deregulation has also enabled rapid international capital flows. Globalisation has accelerated significantly since the 1980s.
Q2: What are the economic effects of globalisation?
Globalisation increases international trade and investment flows, raising global economic growth and living standards. It enables countries to specialise according to comparative advantage, improving allocative efficiency. Globalisation spreads technology and knowledge internationally, boosting productivity. However, it can increase income inequality within countries as some workers and regions benefit more than others. Globalisation may also increase economic volatility as countries become more exposed to global economic shocks. Overall, globalisation creates winners and losers, requiring government policies to manage adjustment costs.
Sample Quiz Questions
Q1: Globalisation has been driven primarily by technological advances in transport, communications, and information technology.
Answer: TRUE
Technological advances are the primary driver of globalisation. Containerisation revolutionised shipping costs, air freight enabled rapid transport, and the internet enabled instant communication and e-commerce. These technologies drastically reduced the cost and time of international transactions. Policy changes (trade liberalisation, financial deregulation) and institutional developments (WTO, FTAs) have also contributed, but technology made globalisation economically feasible.
Q2: Globalisation has reduced income inequality both between countries and within countries.
Answer: FALSE
Globalisation has reduced income inequality between countries by enabling developing countries like China and India to grow rapidly and catch up with developed countries. However, globalisation has increased income inequality within many countries as highly skilled workers and capital owners benefit more than low-skilled workers facing competition from imports. Within-country inequality has risen in both developed countries (manufacturing job losses) and developing countries (urban-rural divides).
Q3: Multinational corporations operating in multiple countries contribute to increased global economic integration.
Answer: TRUE
Multinational corporations (MNCs) are major drivers of globalisation by integrating production across countries through global value chains. MNCs locate different production stages in different countries based on comparative advantage, creating complex international supply chains. They facilitate international transfer of technology, management practices, and capital. MNCs account for over two-thirds of global trade (including intra-firm trade between subsidiaries) and are responsible for most foreign direct investment flows.
Revision Tip
Globalisation is a case-study heavy topic — build a Revizi deck of 5+ real-world examples (China manufacturing, Apple supply chain, Indian IT services, etc.) you can pull from in extended response.
Related Concepts
Last updated: March 2026 · 2 flashcards · 3 quiz questions