Chapter 6: Business Structure

Question 1

What is globalisation?

Answer 1

Globalisation: the increasing freedom of movement of goods, capital and people around the world.

Question 2

What is free trade?

Answer 2

Free trade: no restrictions or trade barriers exist that might prevent or limit trade between countries.

Question 3

Define tariffs

Answer 3

Tariffs: taxes imposed on imported goods to make them more expensive than they would otherwise be.

Question 4

Define quotas

Answer 4

Quotas: limits on the physical quantity or value of certain goods that may be imported.

Question 5

Define voluntary export limits

Answer 5

Voluntary export limits: an exporting country agrees to limit the quantity of certain goods sold to one country (possibly to discourage the setting of tariffs/quotas).

Question 6

Define protectionism

Answer 6

Protectionism: using barriers to free trade to protect a country’s own domestic industries.

Question 7

Define multinational business

Answer 7

Multinational business: business organisation that
has its headquarters in one country, but with operating branches, factories and assembly plants in other countries.

Question 8

Define privatisation

Answer 8

Privatisation: selling state-owned and controlled business organisations to investors in the private sector.