2.1.3 Globalisation Flashcards
What is international trade?
The flow of goods and services between countries
What is an import?
A good brought into the country
What is an export?
A good sold to another country
Why would a business import goods?
Cheaper products
Potentially better quality
Not possible to produce in that country
What is globalisation?
The increasing number of businesses that are operating on an international scale
What are the benefits of globalisation?
Expand customer base
More revenue stream
Enhances global cooperation
Explore the potential of different markets
Spreading the risk
More diverse workforce
Increase brand exposure
What are the drawbacks of globalsation?
Potential damage to reputation
Different taxes
Culture clash
Increased competiton from foreign companies
How do governments protect businesses?
Tarrffs
Quotas
Export subsidy
What is a tariff?
A tax placed on an importto increase its price
What is a quotas?
A trade restriction limiting the number of goods a business imports or exports
What is an export subsidy?
The government can lower the cost of production for domestic firms to make them more attractive fro foreign buyers
What is a trade bloc?
An agreement between countries to trade freely without a tariff imposing them
