External influences on business issues Flashcards
Business and international economy
Explain Golbalisation
It is the term to describe the increase in worldwide trade and movement of people and capital between countries
What happened when there is golbalisation?
(i)Increase number of free trade agreement
(ii)Improve and chpear transport
(iii)Developing and emerging country
Explain the advantage of globalisation
(i)Allows business to start selling in foreign market
(ii)can open factories and production aborad
(iii)import material from other countries
Explain disadvantage of globalisation
(ii)Increasing import into country from foreign competitors
(ii)Increase investment by multinational in home country
(iii)Employees may leave domestic firms if they don’t get pay well
Explain protectionism
It refers to when government protect domestic firms from foreign competitors
Explain import quota
It is a restriction on the quality of goods that can be imported into the country
Explain traffits
They are taxes on import
Explain its advantage
(i)It will reduce the number of foreign goods in the domestic market
(ii)Reduce the competitiveness of the foreign market
Explain multinational companies
They are firms with operations in more than one country
Explain why business become multinational?
(i)To produce good with lower cost
(ii)To extract raw material for production
(iii)To produce goods nearer to market
Explain the advantage of a multinational setting up in their country
(i)More job are created
(ii)Increase GDP in the country
(iii)bring new ideas and methods into the country
Explain the disadvantage of a multinational setting up in their country
(i)The job created are often for unskilled task
(ii)local business may need to shut down
(iii)They can influence the government and economy
Explain exchange rate
It is the price of one currency in terms of another currency
