2.4 Globalisation Flashcards
What is meant by the term “globalisation”?
The trend for markets to become worldwide in scope.
What is meant by the term “international trade”?
Selling goods and services across national frontiers.
What is meant by the term “multinational company”?
One that produces goods and services in more than one country.
[also known as transnational corporations]
What is meant by the term “tariff”?
A tax on foreign goods imported into a country.
What is meant by the term “economies of scale”?
The fall of unit costs of production as the output rises within a business.
What is meant by growth in globalisation?
When a business sells increased quantities of its products.
What is meant by the term “inward investment”?
When governments, businesses and individuals invest capital into another country such as by building new factories or buying companies.
What is meant by takeover in globalisation?
When one business buy control of another business.
What are the benefits of globalisation?
> access to new markets
↳ it has offered the chance for Uk businesses to sell in new markets helping them achieve growth and enjoy economies of scale.
rising inward investment
↳ the funds invested in the UK from overseas has helped some industries expand.
new and cheaper resources
↳ helps increase profits.
improvement in production methods
↳ more encouragement for UK businesses to become more competitive to survive.
What are the drawback of globalisation?
> increased competition. > risk of economic external shocks. > risk of takeovers ↳ easier for businesses overseas to buy or takeover UK businesses. > tax avoidance.
What is meant by the term “price”?
The amount a business asks a customer to pay for a single product.
What is meant by the term “product design”?
Translates the needs of consumers or the inventiveness of entrepreneurs into a saleable product.
What is meant by the term “quality”?
The extent to which a consumer is satisfied with a product.
What are the benefits to having a well-designed product?
> they are distinctive and easily recognised by consumers.
can sometimes charge higher prices like Apple and its computers.
consumers may become loyal to the brand or business and make regular/repeat purchases.
What is meant by the term “exports”?
Goods and services produced by a business in one country and sold in another one.
