4.1 Globalisation Flashcards
Name 3 implications of economic growth for businesses
-new export opportunities -> as developing countries see incomes ^ -> UK businesses may find new markets to export to
-offshoring production -> many UK manufacturers -> closed uk factories -> re-opened in developing countries -> lowers costs ->
-^ domestic competition -> as countries develop -> ^ capital -> able to export to UK -> ^ competition for UK businesses
Definition of offshoring
moving business function -> another country
-lowers costs
Implication of economic growth for individuals
-rural -> urban migration -> agricultural move to manufacturing jobs
-> ^ skill levels within economy
What is GDP per capita
measure of total output of a countrys economy
What is purchasing power parity
factors in differences in cost of living
What is the human development index
determines quality of development through life expectancy, education, income
Name 4 indicators of growth
-gdp per capita -> ^ levels of income pp -> clear indicator of development -> earning ^ -> spending ^
-literacy -> ecnomic development -> ^ literacy rates -> ^ producitivity -> ^ quality of products -> betters economic development
-health -> as economy ^ -> health ^ -> better treatment for diseases
-human development index -> education, income, life expectancy ^ -> allows for ^ growth
What is an emerging economy
where country is becoming a developed nation driven by ^ economic growth & rapid expansion of trade, investment
Give 3 examples of emerging economies
-india
-china
-brazil
Explain 3 ways as to how emerging economies provide opportunities for businesses
->enjoy ^ rates of economic growth
-have rising disposable incomes -> stimulates demand for products
-suitable locations for international operations -> eiether as location for production
Name 2 ways emerging economies are a threat for businesses
competitive pressure -> Emerging economies -> lower labor and production costs, can offer lower prices than developed economies. -> intense competition -> can erode market share and profitability for businesses not able to adapt and remain competitive.
Market growth potential: Emerging economies have ^ pop growth, ^ middle class segments, ^ purchasing power -> attractive for ^ sales oppo -> but differing business practices, cultures -> lost market share -> competitors
What is globalisation
growth of international trade that has made an increasing number of markets global rather than national
What is an emerging economy
an economy in the process of rapid growth and industrialisation
Why will India end up having the highest growth rate not China
-> increases in productive capabilities
-> allowed country to diversify exports into more complex products -> vehicles, electronics
-> gains in economic complexity -> ^ incomes
Name 2 ways middle income economies have led to significant changes in he wolrd
-utilised natural resources -> develop their economies
-utilised their human resources -> ^ supply of goods, services
Name 3 ooporuntiies does trading provide for businesses
-access to raw materials
-cheaper production
-increasing wealth
How does trade lead to increased profits for businesses
-Expanded customer base: it allows businesses to reach new markets -> expand their customer base -> ^ sales -> ^ profit
-access to resources -> cheaper & wider access to resources -> lower production costs -> ^ competitiveness
Implications of economic growth for individuals
-> ^ standard of living
-> ^ income -> ^ spending on luxuries
-> better quality of life
-> may sub leisure for work -> changes employment patterns
Why is UK growth declining in comparison to emerging economies
-UK manufacturing sector has declined as businesses -> manufacturing in emerging economies -> lower labour costs, access to raw materials
How is Literacy rate defined?
The Percentage of adults (over 15) that can read and write
what happens when an Emerging Market is experiencing an increase in average income?
Likely due to the middle classes expanding
This increase in income allows consumers to spend more on both imports and domestically produced goods and services.
Buying more domestics goods encourages the growth of domestic firms –> increased market power –> compete internationally
Consumers may also buy more imported goods and services –> increasing their profitability and making emerging markets more attractive to new entrants.
What Does the Initialism BRICS stand for?
Brazil
Russia
India
China
South Africa
What does the Initialism MINT stand for?
Mexico
Indonesia
Nigeria
Turkey
How does Economic growth create trade opportunities and what is the implications for both individuals and businesses?
economic growth
-> consumption is also growing
-> ^ disposable income
-> ^ demand
income elastic demand (customers less sensitive to price change as have more money) -> ^ profit
goods/ services can be produced domestically or imported from abroad, creating many opportunities for trade.
Name the 4 positive impcats economic growth has on businesses
- ^ profits
- customers have more income elastic demand
-^ trade
-lower costs
Name the 3 positive impacts economic growth has on individuals
- decreased unemployment
-^ income
-^ standard of living
How does Economic growth alter existing employment patterns and what is the implications for both individuals and businesses ?
economic growth -> ^ employment -> ^ income -> ^ disposable income -> ^ demand -> ^ sales
What are 4 indicators of growth?
GDP per Capita
literacy
Health
Human Development Index
How is GDP per capita used as an indicator of a countries growth
look at it over a period of time to see improvements
-> ^ GDP -> ^ standard of living
How is literacy used as an indicator of a countries growth?
literacy rate = % of adults that can read & write
quality of literacy determines quality of workforce -> how productive they are & customers