Business Activity and influences on businesses :Unit 9-15 Flashcards
1
Q
- What are emerging economies?
A
rapidly growing economies - emerging economies have huge growth potential but also pose significant risks.
2
Q
- What is globalization?
A
it is the growing integration of the world’s economies.
3
Q
- What are the 5 key features of globalization?
A
- goods and services are traded freely across international borders.
- People are free to live and work in any country they choose.
- There is a high level of interdependence between nations.
- capital can flow freely between different countries.
- Free exchange of technology and intellectual property.
4
Q
- What is intellectual property?
A
people’s knowledge or creative ideas that have commercial value and are protectable under different forms of copyright.
5
Q
- What are the 5 reasons for globalization?
A
- Development in technology.
- International transport networks have improved in recent years.
- a huge amount of deregulation.
- increase in tourism has also helped globalization to thrive.
- firms want to sell abroad, once domestic markets become saturated.
6
Q
- What is a monetary system?
A
system of money in a particular country or the world as a whole, and the way that is is controlled by governments and central banks.
7
Q
- What is saturate(market)?
A
to offer so much of a product for sales that there is more than people want to buy,
8
Q
- What are the 4 actions of a government that does?
A
- international borders open.
- Put down trade barriers.
- are free to live and work in overseas countries.
- planning and development permission is accepted.
9
Q
- What are the 4 opportunities of globalization?
A
- Access to larger markets.
- Lower costs.
- Access to Labor.
- Reduced taxation.
10
Q
- What are the 3 threats of globalization?
A
- Competition.
- International takeovers.
- Increased risk of external shocks.
11
Q
- What is a hostile takeover?
A
takeover that the company being taken over does not want to or agree to.
12
Q
- What are the 3 reasons multinationals have developed?
A
- Marketing.
- Economies of scale.
- Technical and financial superiority.
13
Q
- What are commodities?
A
products that are bought and sold.
14
Q
- What are the 5 benefits to a business of becoming a multinational?
A
- Larger customer base.
- Lower costs,
- Higher profile.
- Avoiding trade barriers.
- Lower taxes.
15
Q
- What are the 6 benefits of multinationals to a country/ economy?
A
- increase in income and employment.
- increase in tax revenue.
- increase in exports.
- transfer of technology.
- improvement in the quality of human capital.
- enterprise development.
16
Q
- What are the currency reserves?
A
money in foreign currency held by a country and used to support its own currency and to pay for imports and foreign debts.
17
Q
- What is human capital?
A
people and their skills.
18
Q
- What is enterprise?
A
the activity of starting and running businesses
19
Q
- What are the 4 drawbacks to a multinational to a country or economy?
A
- Environmental damage.
- Exploitation of less developed countries.
- repatriation of profits.
- Lack of accountability.
20
Q
- What is exploitation?
A
-a situation in which you mistreat someone by asking them to do things for you, but give them very little in return.
21
Q
- What is the repatriation of profit?
A
where a multinational returns the profits from an overseas venture to the country where it is based in.
22
Q
- What is surplus?
A
amount of something that is more than what is needed or used.
23
Q
- what are the two features of international trade?
A
- obtain goods that cannot be produced domestically.
- obtain goods that can be bought more cheaply from overseas
24
Q
- What are exports?
A
goods and services sold overseas.
25
25. What are imports?
goods and services bought from overseas.
26
26. What is visible trade?
trade in physical goods.
27
27. What is invisible trade?
trade in services.
28
28. What is a balance of trade (or visible balance)?
difference between visible exports and visible imports
29
29. What is exchange rate?
value of one currency in term in terms of another.
30
30. What are transactions?
business deals, or actions such as buying or selling something.
31
31. What does a fall in exchange rates have an impact on exports? imports?
exports will increase. imports will decrease.
32
31. What does a rise in exchange rates have an impact on exports? imports?
exports will decrease. imports will increase.
33
32. What is commission?
an extra amount of money that is paid to a person or organisation according to the value of the goods they have sold or the services they have provided.
34
33. What are the 9 public services governments spend on?
- health care.
- defense.
- education.
- a judicial system.
- policing.
- transport networks.
35
34. how is money raised to help fund public sector services?
-taxation
36
35. What is fiscal policy?
using taxation and government expenditure to manage the economy,
37
36. what is taxation?
the levying of tax.
38
37. How do constraints on public spending impact? - The public sector -private sector - the public
- lay off of staff.
- private sector businesses that rely on public sector contracts.
- cuts in pension.
39
38. What are the 4 ways government affects business activity?
- change the law.
- the rate of interest and exchange rates.
- government expenditure and taxation.
- introduce polices that have a direct impact on businesses such as giving subsidies to farmers.
40
39. What are the 3 specific approaches to government regulating business activity?
- infrastructure provision.
- legislation.
- trade policy.
41
40. What are the 3 areas of legislation?
- consumer protection
- competition policy.
- environmental legislation.
42
41. What are social security payments?
money taken by the British government from people's wages to pay for the system of payments to people who are unemployed or ill.
43
42. What is anti-competitive practices?
(restrictive trade practices) attempts by firms to prevent or restrict competition.
44
43. What are barriers to entry?
- restriction that mean it is difficult for new firms to enter a market.
45
44. What are the 4 anti-competitive practices/ restrictive practices?
- increasing prices to higher levels.
- price fixing avoid price competition.
- restricting consumer choice by market sharing.
- raising barriers to entry.
46
45. How does the government promote competition? (3)
- Encourage the growth of small firms.
- Lower barriers to entry.
- Introduce anti- competive legislation.
47
46. What is protectionism?
use of trade barriers to protect domestic producers.
48
47. What are infant industries?
new industries that are yet to be established.
49
48. What is dumping?
where a business sells goods in another country often below cost.
50
49. What are the 4 uses of trade policy?
-protect jobs .
- protect infant industries.
- prevent dumping.
- raise revenue from tariffs.
51
50. What are the 4 trade barriers?
tariffs.
- Quota.
- Subsidy.
- Administrative barriers.
52
51. What is Quota?
a physical limit on the amount allowed into the country.
53
52. What is subsidies?
the giving of financial support, grants, tax breaks, to help exporters face fierce competition from importers.
54
53. What are Tariffs?
a tax imports.
55
54. What are Administrative barriers?
the use of strict health and safety or environmental regulations.
56
55. What are external factors?
factors that affect the business that are completely beyond their control.
57
56. What are the 4 external factors?
- Social.
- Technological.
- Environmental.
- Polictal/Legislation
58
57. What are the 5 social changes?
- increased consumer awareness.
- changing demand patterns.
- Increased numbers of women at work.
- More part-time workers.
- Urbanization.
59
58. What is urbanization?
process of constructing more and more buildings on rural land.
60
59. What are the 3 impacts of technology on businesses?
- cheaper.
- high productivity.
- improved communication and transport systems.
61
60. What is capital-intensive?
use of relatively more machinery than labour in production
62
61. What are the 4 environmental issues?
- Global Warming.
- Habitat Destruction.
- Resource depletion.
- sustainable development.
63
62. What are the 4 ways for sustainable development?
- Reusable and recycled packaging,
- use of more renewable energy sources.
- explore ways of selling waste as a by product.
- reduce business travel and use online communication.
64
63. What are the 6 measures of success in business?
- Revenue.
- Market share.
- Profit.
- Customer satisfaction.
- Growth
65
64. What are the 5 measures of growth?
- Turnover / revenue.
- The number of employees.
- Market share.
- the amount of capital employed.
- EU definitions of size.
66
65. What is capital employed?
amount of money invested in a business.
67
66. What is overtrading?
taking on more work than a business can afford to fund effectively.
68
67. What is inventory?
stock of goods
69
68. What is business failure?
Business failure refers to a company ceasing operations following its inability to make a profit or to bring in enough revenue to cover its expenses.
70
69. What are the 4 reasons for business failure?
- cash flow problems.
-lack of finance.
- Not competitive.
- failure to innovate.
71
70. What are the 8 reasons for cash problems?
- overtrading.
- investing too much in fixed assets.
- allowing too much credit.
- over-borrowing.
- seasonal factors.
- unexpected expenditure.
- external factors.
- poor financial management.
72
71. What are fixed assets?
resources that are used repeatedly for a period of time by a business such as property, tools, vehicles, and machinery.
73
72. What is downturn?
period or process in which business activity, production, etc. is reduced and conditions become worse.
74
73. What is undercapitalized?
- starting a business with in sufficient capital.
75
74. What are the 5 reasons for a business not being competitive?
- new entrants of rivals.
- ineffective cost control.
- ineffective marketing.
- Lack of business skills.
- Poor leadership.
76
75. What are the 5 reasons for ineffective cost control?
- too small to exploit economies of scale.
- they may be wasteful.
- It is possible that a business is paying too much for some of its resources.
- Might not be minimizing labor costs.
- costs might also rise owing to external factors.
77
76. What are the 4 ineffective marketing?
- failure a launch a new product.
- inappropriate pricing strategies.
- might invest too heavily in overpriced or inappropriate marketing campaigns.
- might use appropriate marketing strategies.
78
77. What are 4 possible rivalry coming from new entrants?
- bringing out superior products.
- read market conditions more effectively.
- charge lower prices because their costs are lower
- Use 'destroyer pricing' this might happen when a company dump a cheap product in a foreign market.
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