Globalisation

Question 1

What is globalisation

Give 3 examples

Answer 1

Businesses or other organisations developing on an international scale.
Cotton on, mining companies, Susan

Question 2

Define MNC

Give 3 examples

Answer 2

Multi national corporation

A company that has its facilities in at least one other country other than its own home country. Nike, Apple, Allianz

Question 3

What does the business term micro mean?

Give 2 examples

Answer 3

A business that operates on a very small scale. Sole trader and partnership

Question 4

Define Australian made

Give 3 examples

Answer 4

Products whose ingredients or production mostly originate from Australia. Cooking oil, sauces, bath products.

Question 5

Define Australian owned

Give 3 examples

Answer 5

All of the ingredients, production and processing is completed in Australia. Wine, fruits and veg, jam

Question 6

Define diversification

Give 1 example

Answer 6

Spreading the companies assets over a variety of places. A company in Australia moves manufacturing to Asia

Question 7

Define outsourcing

Give 1 example

Answer 7

Employ other people from other companies or countries to do the work. Australian phone service people are calling from China.

Question 8

Explain the economies of scale

Give 1 example

Answer 8

When production is increased, the costs are less per item. If you make 1 design it can be used for many buildings.

Question 9

Define the exchange rate

Give 1 example

Answer 9

The value of one currency for the purpose of converting to another. The conversation from AUD to USD

Question 10

Define interest rate

Give 1 example

Answer 10

The proportion of a loan that is charged as interest to the borrower. When a company pays back the loan they also pay extra which is the interest.

Question 11

Define tax haven

Give 1 example

Answer 11

A country or independent area where taxes are levied at a lower rate.
Taxes are cheaper in Bulgaria than they are in Australia.

Question 12

Define transfer pricing

Give 1 example

Answer 12

The setting of the price for products sold between controlled legal entities within an enterprise.
If a subsidiary sells goods to a parent company.

Question 13

Explain the triple bottom line and the CSR

Give 1 example

Answer 13

Corporate social responsibility
People, planet, profit
Businesses need to look after the environment and workers as well as making money. Increases the businesses reputation.

Question 14

Explain ecological sustainability

Give 1 example

Answer 14

Using our natural resources wisely in the short term so that there are some left in the long term.
Cutting down on the use of materials that could be gone in the future.

Question 15

Give 3 characteristics of an SME?

Give 3 examples

Answer 15

Small Medium Enterprise 
- up to 200 staff 
- local 
- provides innovation 
Cafe, hairdresser, dentist

Question 16

Define GFC

Give 1 example

Answer 16

Global financial crisis
A worldwide period of economic difficulty experienced by markets and consumers.
A company is making a lot of something but no one is buying it.

Question 17

Explain exporting

Give 1 example

Answer 17

Selling your products to a different company or place.

Australia selling products to Asia

Question 18

Explain importing

Give 1 example

Answer 18

Buying products from other countries or places.

Australia buying products from Asia.

Question 19

Define subsidiary

Answer 19

A company that is controlled or owned by another company.

Question 20

Define the term alliances

Answer 20

An agreement between businesses to create a new business.

Question 21

What is a business licence?

Answer 21

Permits issued by the government that allow individuals or companies to set up in a particular place or area.

Question 22

Define the term franchise

Give 3 examples

Answer 22

A license to use a companies name, business idea and model in exchange for the money paid to the owner of the company.
Maccas, KFC, dick smith

Question 23

What does the business term macro mean?

Answer 23

The conditions that exist in the economy as a whole.

Question 24

Define deregulation

Give 1 example

Answer 24

Removing or reducing state regulations.

Australian companies tend to employ workers from overseas because the regulations on labour costs is significantly low.

Question 25

Define protectionism

Give 1 example

Answer 25

The economic policy of restraining trade between states or countries.
Competition will be less because there are little competing countries.

Question 26

Define FDI

Give 1 example

Answer 26

Foreign direct investment
A controlling ownership in a business enterprise in one country by an entity based in another country.
A Canadian company setting up a joint venture to develop a mineral deposit in Chile.