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IAI Actuarial Core Principles · Business Economics · Globalisation and multinational business

Which statement best describes economic globalisation as it affects a business?

Economic globalisation is the growing integration of national economies through cross-border movements of goods, services, capital, technology and labour. It increases interdependence between countries and widens markets for firms, unlike protectionism, a single world currency or purely domestic selling.

  1. AThe growing integration of national economies through cross-border flows of goods, services, capital, technology and labourCorrect
  2. BThe replacement of national currencies by a single world currency
  3. CA government policy of raising tariffs to protect domestic firms
  4. DThe practice of a firm selling only in its home market at uniform prices
  5. The takeover of all domestic firms by public sector enterprises

Explanation

Globalisation is the increasing interdependence and integration of economies through trade, investment, finance, technology and people movements. A single currency, tariff increases and home-only selling run against or are unrelated to this process.

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