4.1.2. International Trade+Business Growth

Question 1

Imports

Answer 1

-Products and services bought by people and businesses in one country from another country

Question 2

Exports

Answer 2

• Goods and services sold by domestic businesses to people or businesses in other countries

Question 3

Specialisation

Answer 3

-Choosing to produce only one product or products for single market
-Porters focused differentiation or focused cost j look leadership is an example.

Question 4

Link between specialisation and competitive advantage

Answer 4

Increased efficiency=lower unit costs
-Lower selling price by same amount unit costs have been preserved profit margin on each unit but lower prices boosts competitiveness+ boosts sales

-Can choose to not adjust its prices and settle for higher profit margins

Question 5

FDI

Answer 5

Investment by foreign firms. Business purchases non current assets in another country. Results in more than 10% share of ownership of domestic firms

Question 6

Inward FDI

Answer 6

Foreign business invests in local economy (buying property or building factories) so money flows into economy

Question 7

Outward FDI

Answer 7

Domestic business expands its operations to a foreign country (building production facilities or buying retail outlets, takeovers of foreign businesses)

Question 8

Benefits of actual FDI

Answer 8

-Avoiding problems involved in exporting
-Avoid transporting costs
-Avoiding trade barriers
-Access to natural resources
-Lower operating costs