4.1.2 International Trade And Business Flashcards
What are some common UK exports?
Medical supplies, cars, gas turbines and gold.
What is specialisation?
The process of concentrating on and becoming expert in a particular subject or skill. E.g. for countries they may have industries that lead the world.
What are the befits to India of specialisation?
1.) Increased productivity and output, meaning reduced average costs and economies of scale.
2.) As more resources are devoted to the industry rather than being spread out the scale of production can be increased to gain EOS.
3.) This gives the Indian call service industry comparative advantage over the next best country.
4.) The increased productivity will lead to GDP growth and increasing sales will boost economic growth.
What are the downsides of specialisation?
-A country may become over reliant on one industry (eggs in one basket) and this does not spread risk.
-Other countries may become cheaper in the same industry making it harder to compete.
-If the byssinosis grows too big it may suffer from DEOS through lack of communication and coordination.
Define FDI
Foreign direct investment, when a business from one country decides to establish themselves in another country.
What are some benefits of FDI?
-FDI may decide to build factories or other business premises which will create jobs for the host nation.
-MNCs can bring skills and technology to emerging countries.
