4.1.2 International trade and business growth Flashcards
1
Q
What are imports?
1
A
- G&S arrive and cash flows out of UK
2
Q
What are exports?
1
A
- G&S flow out and cash flows into UK
3
Q
What are the pros of exports?
3
A
- Avoid over comp (price sensitive)
- Spread risk (UK may face recession, overseas rev)
- EOS
4
Q
What are the cons of exports?
2
A
- Diff foreign exchange (SPICED lower rev)
- Managing ^remote relationships, admin costs^
5
Q
What are the pros of Imports?
3
A
- Higher quality (USP)
- Cheaper goods
- Intro new products into market
6
Q
What are the cons of imports?
3
A
- Cultural risk
- Political risk (hostility between both countries)
- Foreign exchange risk
7
Q
How can specialisation boost efficiency?
1
A
- Employee repeating simple task gets quicker at task
8
Q
What is business specialisation?
2
A
- Producing 1 product, for single market
- Focused differentiation (Porter)
9
Q
What is Foreign Direct Investment (FDI) and an example?
2
A
- Business purchases non-current assets in another country
- Production facilities
10
Q
What are the pros of FDI?
3
A
- > Price for consumers, >operating costs
- ^Favourable environment for investors
- ^Target countries income, more jobs, ^wages
11
Q
What are the cons of FDI?
3
A
- Constant political change = expropriation
- Focus resources elsewhere, >dom investment
- Pressure groups criticise bad work conditions in target country
12
Q
What is inward FDI?
1
A
- Money coming into the country
13
Q
What is outward FDI?
1
A
- Money coming out to invest in another country
14
Q
What is expropriation?
1
A
- Countries gov control over investors assets
