Business structure

Question 1

private limited company

Answer 1

a business that is owned by shareholders who are often members of the same family; this company cannot sell shares to the general public.

Question 2

public limited company

Answer 2

a company whose shares are traded on a stock exchange and can be bought and sold by the public.

Question 3

initial public offering

Answer 3

an offer to the public to buy shares in a public limited company.

Question 4

primary sector business activity

Answer 4

firms engaged in farming, fishing, oil extraction and all other industries that extract natural resources so that they can be used and processed.

Question 5

secondary sector business activity

Answer 5

firms that manufacture and process products from natural resources, including computers, brewing. baking, hotels and tourism.

Question 6

tertiary sector business activity

Answer 6

firms providing services to consumers and other businesses, such as retailing, transport. insurance, banking, hotels and tourism.

Question 7

industrialization

Answer 7

the growing importance of secondary sector manufacturing industries in developing countries is called industrialization,

Question 8

benefits of industrialization

Answer 8

1. total national output ( GDP) increases and this raises average standards of living.
2. Increasing output of goods can result in lower imports and higher exports of such products.
3. Expanding manufacturing businesses will result in more jobs being created.
4. Expanding and profitable firms will pay more tax to the government.
5. Value is added to the country’s output of raw materials. rather than just exporting these as basic, unprocessed products.

Question 9

problems of industrialization

Answer 9

1. the chance of work in manufacturing can encourage a huge movement of people from the countryside to towns, which leads to housing and social problems.
2. imports of raw materials and components are often needed. which can increase the country’s import costs.
3. Much of the growth of manufacturing industry is due to the expansion of multinational companies. these can have negative impact on the economy too.
4. rising incomes associated with higher living standards have led consumers to spend much of their extra income on services rather than more goods. There has been substantial growth in tourism, hotels and restaurants services, financial services and other services. However, spending on the physical goods has risen more slowly.
5. Manufacturing businesses in developing countries face much more competition as a result of increasing global industrialization , These rivals tend to be more efficient and use cheaper labour. therefore, rising imports of goods are taking the market away from the domestic secondary sector.

Question 10

consequences of deindustrialization

Answer 10

job losses in agriculture, mining and manufacturing industries
movement of people towards town and cities
job opportunities in service industries- tertiary and quaternary.
increased need for retraining programmes to allow workers
to find employment in service industries.