4.1

Question 1

define globalization

Answer 1

the process of deeper economic integration between countries and regions of the world

Question 2

state 5 causes of globalisation

Answer 2

deregulation of markets
political changes
removal of trade barriers
lower transport costs
improved communication

Question 3

disadvantages of globalisation

Answer 3

unskilled workers in developed countries jobs relocated
domestic businesses have increased competition
increased transport contributes to global warming

Question 4

what impact does a reduction in GDP have on a business

Answer 4

increase in imported goods if country cannot keep up with demand
increased prices leads to inflation

Question 5

what are the BRIC MINT countries

Answer 5

Brazil
Russia
India
China
Mexico
Indonesia
Nigeria
Turkey

Question 6

developed economies

Answer 6

mature economies with a relatively high standard of living with generous welfare provision

Question 7

developing countries

Answer 7

still have a large primary sector, incomes are low and work force is labor intensive

Question 8

emerging economies

Answer 8

fast growing economy with rapidly rising standards of living & growth in secondary and tertiary sector
migration to urban areas

Question 9

what is GDP per capita

Answer 9

measures the total output of a country divided by the population, indicated average incomes, doesn’t consider inequality

Question 10

state the 4 factors used in measuring growth

Answer 10

GDP per capita
literacy rates
health
HDI

Question 11

what does HDI take into account

Answer 11

gross national income
life expectancy
average years of education

Question 12

what is FDI

Answer 12

foreign direct investment
investment in a foreign country by a business to obtain control of another business

Question 13

advantages of FDI

Answer 13

develops the country
builds relationships with businesses and countries
improves infrastructure & technology
increased employment and improves skills

Question 14

disadvantages of FDI

Answer 14

exploitation of resources
unethical practices
expensive & takes a long time
may take advantage of land
takes away from domestic sales

Question 15

what is greenfield FDI

Answer 15

a company will build on its own with brand new facilities from the ground up

Question 16

what is brownfield FDI

Answer 16

when a company purchases or leases an existing business

Question 17

what is exporting

Answer 17

selling goods/services to other countries
domestic products sold abroad

Question 18

what is franchising

Answer 18

selling a lisence to use the firms name/product/service in return for initial payment & royalties control over market
cost of expansions goods

Question 19

what is licensing

Answer 19

one firm producing and marketing another businesses products

Question 20

joint venture

Answer 20

two or more businesses combined resources to operate in a particular country
risk and cost shared
conflict over control

Question 21

what is a merger

Answer 21

when a business joins with another business to create a new organization

Question 22

what is a takeover

Answer 22

when one business buys the entirety of another

Question 23

what is direct investment

Answer 23

investment in a foreign country by a business to obtain control of another business

Question 24

economic globalization

Answer 24

refers to the movement of goods, capital, services, technology and information

Question 25

social globalization

Answer 25

refers to the sharing ideas and information

Question 26

political globalization

Answer 26

the amount of political co-operation that exists between different countries

Question 27

what is trade liberalization

Answer 27

countries around the world have signed trade agreements that reduce tariffs, quotas and restrictions on free trade

Question 28

what factors have increased globalisation

Answer 28

trade liberalization political change cost of transport and communication transnational companies FDI migration structural change

Question 29

what are transnational companies

Answer 29

one of the main drivers of globalization, investment in factories & operation in other countries

Question 30

what is protectionism

Answer 30

involves supporting domestic industries against foreign competition governments use policies such as quotas & tariffs and other barriers that increase prices of imported goods or make it more difficult for foreign companies

Question 31

what are tariffs

Answer 31

tax placed on an import to increase its price and decrease its demand, they are imposed by governments to raise revenue and to restrict imports however it raises financial price to consumers

Question 32

what are quotas

Answer 32

a physical limit on the quantity of a good imported or exported imposing a limit on the quantity of goods that are imported which will increase the share of the market available

Question 33

what are subsidies

Answer 33

a way of the government protecting domestic markets money is given to local producers to make their goods cheaper in the domestic market

Question 34

what is legislation

Answer 34

product quality requirements to restrict certain products that don't meet standards

Question 35

what is free trade

Answer 35

when government put in place policies that allow producers from overseas nations to freely sell their goods in a country

Question 36

what are the reasons for protectionism

Answer 36

doesn't apply to domestic goods so they are likely to be cheaper and ensure better job security for employees in the domestic market raises import tax for governments favours domestic businesses over MNCs improves balance of trade

Question 37

what are the reasons against protectionism

Answer 37

lack of cheaper alternatives expensive to consumers less competitive globally less choice for consumers

Question 38

what is a trading bloc

Answer 38

a type of intergovernmental agreement to reduce regional trade barriers, depending on how closely the members integrate their economies they may form different trading blocks

Question 39

how many members are there in the EU

Answer 39

27

Question 40

what is the consumer base of the EU

Answer 40

550million customers

Question 41

who are the members of NAFTA

Answer 41

canada, mexico, united states

Question 42

what is the consumer base of NAFTA

Answer 42

450million customers

Question 43

what is the consumer base of ASEAN

Answer 43

500million customers

Question 44

what are the reasons for trading blocs

Answer 44

encourages trade between countries provides access to larger markets free movement of people which increases employment higher opportunity for growth more negotiating power

Question 45

what are the reasons against trading blocs

Answer 45

increased competition may be difficult to expand outside of the trading blocs embargos stop you from trading with countries outside of the blocs