The Role Of Trade Flows In Globalization

Submitted By olivepop
Words: 537
Pages: 3

1. Describe the role of trade flows in globalisation. !

!

Trade is integral to the process of globalisation. Increased trade flows have brought large benefits to many countries and citizens. Trade has allowed economies to benefit from specialisation and economies to produce at a more efficient scale. It has accelerated productivity, supported the technological advancements and increased the goods and services available to consumers. As trade flows involve exports and imports of goods and services between countries, it plays a key role in globalisation. The interaction and links that are established as a result of increased trade flows. !

!
!
!
!

2. Summarise recent changes in the direction and composition of international trade in goods and services. !
International trade in goods an services have continued to increase recently. These high rates of world trade growth continue to outstrip output growth. !
3. Explain the different between investment flows and financial flows.!
Financial flows refers to all flows of money in an out of an economy, including overseas savings in Australia as well as investment and borrowing money, however investment flows refers to FDI’s, portfolio investment, and other investment. It specifically refers to money flows which give a return.!

!
!

4. Outline the role of foreign exchange markets in international financial flows. !
Foreign exchange markets (FOREX markets) are networks of buyers and sellers exchanging one currency for another where the value is determined in terms of another currency. FOREX markets have experienced extremely high amounts of growth, mainly due to speculators wanting to make a short-term profit. Banks facilitate foreign exchange, and financial firms around the world function as anchors of trading between a wide range of multiple types of buyers and sellers. The foreign exchange market determines the relative values of different currencies, essential for these financial firms such as banks to operate (e.g. RBA). !

!
!

5. Outline the role played by transnational corporations (TNCs) in globalisation.!
The process of globalisation has led to a rise in transnational corporations (TNCs). The expanding reach and wealth of TNCs has been matched with concerning levels of labour exploitation in the developing world. This is because many TNCs make their profits by employing people