Global trade & interconnection

Globalisation is the increasing interconnection between people, businesses and countries — driven by trade, technology, and transport. Global trade lets countries specialise in producing what they're best suited for and trade for the rest, but it also creates interdependence: a disruption in one country (a natural disaster, a factory shutdown) can affect supply chains and prices worldwide.

Key terms

Globalisation:

The increasing interconnection between people, businesses and countries worldwide.

Supply chain:

The sequence of steps and locations involved in producing and delivering a product.

Interdependence:

Countries or businesses relying on each other.

Questions

1. 1. Globalisation refers to:

   • Increasing interconnection between countries worldwide
   • Countries becoming completely isolated
   • A single country's local economy only
   • A type of biome

2. 2. A supply chain is:

   • The sequence of steps to produce and deliver a product
   • A type of currency
   • A single factory only
   • A government department

3. 3. Interdependence means countries or businesses:

   • Rely on each other
   • Have no connection at all
   • Always compete with no cooperation
   • Never trade with each other

4. 4. A smartphone made from parts sourced in multiple countries is an example of:

   • A global supply chain
   • A purely local product
   • A biome
   • A referendum

5. 5. Global trade allows countries to:

   • Specialise and trade for what they don't produce
   • Never trade with any other country
   • Produce absolutely everything themselves always
   • Ignore other countries entirely

6. 6. Technology and transport have generally made global trade:

   • Faster and more connected
   • Slower and less connected
   • Completely impossible
   • Irrelevant to modern life

7. 7. A disruption in one country's factories can affect:

   • Supply chains and prices worldwide
   • Only that one country, with no wider effect
   • Nothing beyond that factory
   • Only unrelated industries

8. 8. Why might a natural disaster in one country affect product availability in another country far away?

   • Global supply chains connect production across many countries
   • Countries never rely on each other for goods
   • Natural disasters only affect the country where they occur
   • Supply chains are always contained within one country

9. 9. A country specialising in producing one type of good efficiently and trading for the rest reflects the benefit of:

   • Specialisation and trade
   • Complete self-sufficiency with no trade
   • Avoiding all international connections
   • Producing everything poorly

10. 10. Why has globalisation increased significantly in recent decades?

    • Advances in transport and communication technology have made global connections easier
    • Technology has made global connections impossible
    • Countries have become more isolated over time
    • Trade has decreased significantly worldwide

11. 11. A company outsourcing manufacturing to another country to reduce costs is an example of:

    • Globalisation in business practice
    • Complete economic isolation
    • A biome interaction
    • A referendum process

12. 12. Which is a potential downside of relying heavily on global supply chains?

    • Vulnerability to disruptions far outside a country's control
    • Guaranteed protection from all disruptions
    • No possible risks at all
    • Complete independence from other countries

13. 13. International trade agreements between countries are designed to:

    • Establish rules and reduce barriers for trading between nations
    • Prevent any trade from happening
    • Only apply to a single country
    • Have no effect on global commerce

14. 14. Why might consumers in one country benefit from goods manufactured in another country?

    • Global production can lower costs and increase the variety of available products
    • Imported goods are always worse quality with no benefit
    • Global trade never affects consumer prices
    • Consumers only ever benefit from entirely local goods

15. 15. Why did global supply chain disruptions during events like the COVID-19 pandemic reveal risks of globalisation?

    • They showed how interconnected and vulnerable global production and shipping networks can be
    • They proved global supply chains are completely immune to disruption
    • They had no effect on global trade at all
    • They showed countries have no interdependence whatsoever

16. 16. Which best explains the trade-off between efficiency and resilience in global supply chains?

    • Highly optimised global chains can be cheaper but more vulnerable to single points of failure
    • Efficiency and resilience are always identical with no trade-off
    • Global supply chains are always the most resilient option
    • There is no relationship between efficiency and vulnerability

17. 17. Why might some countries choose to diversify their trading partners rather than relying on just one?

    • It reduces the risk of major disruption if one trading relationship is affected
    • Diversifying trading partners always increases risk
    • Relying on one partner is always safer
    • Trading partner diversity has no strategic value

18. 18. Global interconnection through trade can also spread economic problems between countries because:

    • A downturn in one major economy can reduce demand for goods from its trading partners
    • Economic problems never cross national borders
    • Countries with trade relationships are financially isolated from each other
    • Global trade has no effect on economic stability

19. 19. Why do critics of globalisation sometimes argue it can widen inequality between and within countries?

    • The economic benefits of global trade are not always distributed evenly
    • Globalisation always benefits every person and country equally
    • Inequality has no connection to global trade patterns
    • Globalisation eliminates all economic inequality automatically

20. 20. Why might governments balance the benefits of globalisation against the desire to protect local industries?

    • To gain trade benefits while managing risks to domestic jobs and production
    • Local industries are never affected by global trade
    • Governments have no role in managing trade policy
    • Protecting local industries has no economic rationale at all

21. 21. Tariffs (taxes on imported goods) are sometimes used by governments mainly to:

    • Make imported goods more expensive, protecting local producers from foreign competition
    • Always make imported goods cheaper than local goods
    • Have no effect on trade or prices
    • Ban all international trade completely