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Business > 4.1 > Flashcards

4.1 Flashcards

1
Q

define globalization

A

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

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2
Q

state 5 causes of globalisation

A

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

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3
Q

disadvantages of globalisation

A

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

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4
Q

what impact does a reduction in GDP have on a business

A

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

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5
Q

what are the BRIC MINT countries

A

Brazil
Russia
India
China
Mexico
Indonesia
Nigeria
Turkey

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6
Q

developed economies

A

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

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7
Q

developing countries

A

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

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8
Q

emerging economies

A

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

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9
Q

what is GDP per capita

A

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

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10
Q

state the 4 factors used in measuring growth

A

GDP per capita
literacy rates
health
HDI

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11
Q

what does HDI take into account

A

gross national income
life expectancy
average years of education

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12
Q

what is FDI

A

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

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13
Q

advantages of FDI

A

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

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14
Q

disadvantages of FDI

A

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

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15
Q

what is greenfield FDI

A

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

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16
Q

what is brownfield FDI

A

when a company purchases or leases an existing business

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17
Q

what is exporting

A

selling goods/services to other countries
domestic products sold abroad

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18
Q

what is franchising

A

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

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19
Q

what is licensing

A

one firm producing and marketing another businesses products

20
Q

joint venture

A

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

21
Q

what is a merger

A

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

22
Q

what is a takeover

A

when one business buys the entirety of another

23
Q

what is direct investment

A

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

24
Q

economic globalization

A

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

25
Q

social globalization

A

refers to the sharing ideas and information

26
Q

political globalization

A

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

27
Q

what is trade liberalization

A

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

28
Q

what factors have increased globalisation

A

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

29
Q

what are transnational companies

A

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

30
Q

what is protectionism

A

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

31
Q

what are tariffs

A

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

32
Q

what are quotas

A

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

33
Q

what are subsidies

A

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

34
Q

what is legislation

A

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

35
Q

what is free trade

A

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

36
Q

what are the reasons for protectionism

A

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

37
Q

what are the reasons against protectionism

A

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

38
Q

what is a trading bloc

A

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

39
Q

how many members are there in the EU

A

27

40
Q

what is the consumer base of the EU

A

550million customers

41
Q

who are the members of NAFTA

A

canada, mexico, united states

42
Q

what is the consumer base of NAFTA

A

450million customers

43
Q

what is the consumer base of ASEAN

A

500million customers

44
Q

what are the reasons for trading blocs

A

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

45
Q

what are the reasons against trading blocs

A

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

Business (22 decks)

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