Globalisation part 2 Flashcards
What does a floating exchange rate mean?
that it fluctuates based on the AD/AS model
How do china keep their exchange rate low?
They sell the yen and buy US dollars through stocks and shares and currencies so supply increases and the exchange right goes down
who controls Interest rates for the European Monetary Union?
European central bank
what are advantages of being with euro?
financial support, reduced vulnerability to external shocks, boost trade investment.
what are disadvantages of being with the euro?
exposure to issues, trade diversion, structural reforms to enhance competition
what are push factors to move into emerging markets?
Saturated markets and competition
what are pull factors to move into emerging markets?
economies of scale
what is offshoring?
International relocation
what is outsourcing?
paying another business to control parts of company
what is onshoring?
Bringing back production to country of origin e.g. apple and china
name 5 factors for expansion into markets?
level of disposable income, infrastructure, ease of doing business, exchange rates
name 5 factors for location?
costs of production, skills/availability of labour, trade blocs, natural resources, likely return on investment
what is the ethnocentric approach and give an example
preferences based on home country… e.g. Panasonic, Sony
what is polycentrism and give an example
preferences on host country e.g. Unilever
what is geo centrism and example
best suited to job e.g. KFC and chana snacker in India as well as Netflix and Disney
