4.1.1 Globalisation — Practice Questions

Five original multiple-choice questions on globalisation, written to the style and difficulty of Edexcel Paper 2 Section A.

5 questions Edexcel A-Level Multiple choice Model answers included

Not read the notes yet? Start with the 4.1.1 Globalisation revision notes.

1. 1. During the 1990s many governments removed the controls that had restricted money moving in and out of their countries. This contributed to globalisation by

   Applied reasoning

   Select one answer

   A Cutting the cost of shipping goods by sea.

   B Raising tariffs on manufactured imports.

   C Removing the barriers to capital movement.

   D Restricting the growth of multinationals.
   Show model answer

   Answer: C (Removing the barriers to capital movement.). Globalisation is not only about goods crossing borders. Edexcel lists the deregulation of financial markets among its drivers: once controls on capital movement were lifted, firms could invest abroad, banks could lend across borders, and savings accumulated in one country could fund investment in another. That is what made large-scale foreign direct investment and globally financed supply chains possible in the first place.

   Why the other options are wrong

   • A — Containerisation cut shipping costs, and it is a separate driver on the same list.
   • B — Higher tariffs restrict trade. It was trade liberalisation — the reduction of tariffs and quotas — that drove globalisation.
   • D — Deregulation made it easier for multinationals to expand across borders, not harder.

2. 2. Global brands displace local products and traditions in a developing country, and younger consumers increasingly adopt the customs of the exporting nations. Among the costs of globalisation this is

   Definition in context

   Select one answer

   A Cultural imperialism.

   B Deindustrialisation.

   C Structural unemployment.

   D Trade diversion.
   Show model answer

   Answer: A (Cultural imperialism.). Cultural imperialism describes dominant cultures spreading through trade and media until they erode local ones. Edexcel lists it among the costs of globalisation to consumers, alongside the closure of domestic firms and doubts about the standards imported goods are made to. It is a cost that appears in no measure of output at all — a country can be richer in GDP terms while losing something its people valued.

   Why the other options are wrong

   • B — Deindustrialisation is the decline of a country's manufacturing sector — an effect on what is produced rather than on culture.
   • C — Structural unemployment is a skills mismatch that leaves workers unable to fill the jobs available.
   • D — Trade diversion is buying from a higher-cost producer inside a trading bloc rather than a cheaper one outside it.

3. 3. A manufacturer sources components from eleven countries, which keeps its costs low. A shipping crisis then halts deliveries for three months and production stops altogether. This illustrates that globalisation can leave firms

   Applied reasoning

   Select one answer

   A Able to achieve greater economies of scale.

   B Protected from competition by foreign rivals.

   C Unable to access any imported raw materials.

   D Vulnerable to disruption they cannot control.
   Show model answer

   Answer: D (Vulnerable to disruption they cannot control.). The length of the supply chain is what makes the low costs possible — each component is sourced wherever it happens to be cheapest. That same length is the vulnerability: a firm depending on eleven countries is exposed to whatever goes wrong in any one of them, and controls none of it. Edexcel lists increased dependence on global supply chains among the costs of globalisation to domestic firms, set directly against the cheaper inputs that are its benefit.

   Why the other options are wrong

   • A — Economies of scale are a benefit of globalisation to firms, and the stem is describing a cost.
   • B — Globalisation exposes domestic firms to more foreign competition, not less.
   • C — The firm can access imported materials perfectly well. The problem is that deliveries stopped, not that the materials do not exist.

4. 4. Free movement of labour is usually presented as a benefit of globalisation for firms. For a domestic firm employing specialists it can also be a cost, because

   Applied reasoning

   Select one answer

   A Its own staff can now be recruited from abroad.

   B It must pay more to keep the workers it has.

   C It no longer has access to a larger talent pool.

   D Its output can no longer be sold overseas.
   Show model answer

   Answer: B (It must pay more to keep the workers it has.). The benefit is real enough: a firm can recruit from a global pool rather than a national one. But the pool is open in both directions. Foreign employers can bid for the specialists a domestic firm already employs, so the wage it must offer to keep them rises. Edexcel lists greater competition for skilled labour among the costs of globalisation to domestic firms, immediately after listing access to that same labour as a benefit — which dominates depends on whether a firm is a net gainer or a net loser of talent.

   Why the other options are wrong

   • A — Recruiting from abroad is the benefit, not the cost. The cost is that everybody else can recruit from here too.
   • C — Free movement gives access to a larger pool of workers, not a smaller one.
   • D — Nothing about the mobility of labour closes a firm's export markets.

5. 5. Table 1 lists four developments in the world economy.
   From Table 1, the only one that promotes globalisation is

   Data interpretation

   Table 1: Four developments in the world economy

   	Development
   Development 1	The IMF and World Bank press members to open their markets
   Development 2	A country raises tariffs on imported steel
   Development 3	A government reimposes controls on capital outflows
   Development 4	A bloc introduces quotas on foreign food

   Select one answer

   A Development 1.

   B Development 2.

   C Development 3.

   D Development 4.
   Show model answer

   Answer: A (Development 1.). Globalisation advances when the barriers to moving goods, capital and labour come down. Only the first development does that: Edexcel lists global institutions — the WTO, the IMF and the World Bank — among the drivers, precisely because they press members towards open markets and freer trade. Each of the other three raises a barrier, and all three work against integration.

   Why the other options are wrong

   • B — A tariff is a tax on imports. It reduces trade rather than encouraging it.
   • C — Capital controls restrict exactly the financial flows whose deregulation helped drive globalisation.
   • D — A quota is a physical limit on imports — another barrier, and a more restrictive one than a tariff.