Question Tag: Service vs. Manufacturing

i) Globalization:
Globalization refers to the growing convergence of national cultures, economies, and political systems, and the growing interdependence of countries worldwide. It is characterized by increased trade, capital flows, and the rapid diffusion of technology, leading to a more interconnected global economy.
(2 marks)

ii) Features of Globalization:

1. The ability of individuals to enter into transactions with individuals and organizations based in other countries.
2. The increased importance of global economic policy relative to domestic policy.
3. The rise of globally linked and dependent financial markets.
4. The reduction in the importance of local manufacturing due to global supply chains.
5. Reduced transaction costs through developments in communications and transport.
6. The rise of emerging, newly industrialized nations.
   (4 marks)

iii) Factors Encouraging the Globalization of World Trade:

1. Financial Factors: Developing world debt often leads to economic reforms required by lenders, promoting globalization.
2. Country/Continent Alliances: Alliances like ECOWAS and AU foster trade and tourism among member countries.
3. Government Policy: Policies that seek to control the balance of payments by discouraging imports can encourage globalization.
4. Legal Factors: Patents and trademarks encourage the development and global spread of technology and design.
5. International Commodity Markets: Efficient systems of trading and communication facilitate global transactions in commodities.
   (6 marks)