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runover mr smith paper 1 > golbailiation > Flashcards

golbailiation Flashcards

1
Q

global trade

A

consumers or buyers of one country can affect the economies of another country
leads to less economically developed crountries

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2
Q

gdp

A

indicates size of nattions exonomy
total market of goods and services produced in a nation in a certain period of time
used to measure economice performance of a country
adjusted so inflantion is ignored
calclated by per capita means divided by amount of people in the country
lest you see how quick economy is growing

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3
Q

dis of GDP

A

doesns show you the cost of living and level of disposable income within a country

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4
Q

what are the other indictors of economic growth

A

GDP
Literacy rate
Health
Hhuman development index

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5
Q

literacy rate

A

percenatge of amount of people aged 15 and above thatt can read and write

increase in literacy rate, indicates indicates increase in ecomic growth as more people are educated meaning more skilled workers within the economy

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6
Q

health

A

assesses countries level of wealth by life expenacty rates, mortality (death rate s etc
increase in health suggests economic growth is growing as more money spent on health care meaning more people are fit for work

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7
Q

human development index

A

measures how developed a country is
measuring life expentanc, income etc
increase in devlopment, incidcated increase in economic growth

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8
Q

imporance of economic gowth on indivduals and businesses

A

increase in level of ouput
increse in empolyment
more people earrning money
amount they are earned is increased
people move out of poverty and into middle class
increase in demand inf oregign firms
increase in sales
more jobs for foreign workers
foregin counteries may aslo start operating in grwoing economies with cheaper labour costs to reduce cists
provides local jobs and increases incomes
however, operating parts of a business has a negaitve effect on individuals in home country, cutting jobs there

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9
Q

emerging economy

A

fast growing economy but not yet fully developed
MINT
BRICS
brics ecomines-brazil, russia, india etc
contain big ppopulatioj, cheap labour costs

mint-mexico and indinesia
economies-emerging economies gowing popualion size
young people getting into workforce

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10
Q

international trade

A

importing and exporting

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11
Q

imports

A

products brought from overseas
when person buys imporated good, money from it goes back to the foregun country where it cae from
money flows out of the economy
increases variety of goods and services
imported products ofte cheaper then imported ones

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12
Q

exports

A

products sold overseas
when business sells exported good, get money from person or busines they sold it to in the other country
money flowing into the economy
use it as way to expand-increase market size
simplest an least risky way

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13
Q

specialisation

A

can gain competitive advantage by specialisation
focus on one poduct or a narrow range of products
occasionally, one country specialises in just one product e.g norway and oil production

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14
Q

adv of specialisation

A

workers beome more efficetnt and skilled as ony focusing on one product or narrow range
meaning both quality and speed of produciton is improved
higher quality allows for higher price to be charged
increased efficeinecy, reduces cost per unit, allowss price to be reduced and profit margin increased

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15
Q

competitive advantage

A

way for a business to be more profitable then its rivals
e.g. firm can get competitive advantage by selling higher quality products having lower costs
competitve advnatge important for international firms as face more competition then firms facing only comp in domestic firms

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16
Q

dis of specialiation

A

lose sales if demand for their product/narrow range is reduced

may icnrease staff trainig costs as if not specialised will need extensive trainingn to gain skills to become specilaised in making that product

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17
Q

Foreign direct investment

A

when firm in one country invests business in another country
may be by merging or taking over an existing business
opening office or branch overseas
investing frim has to have some managerical control of business to class as FDI
most firms horizontal-investing into a foregin business at the same stage of prodcution process
may be vertical-not at same stage of production process

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18
Q

adv of FDI
MADDIE LOVES FACE TIME

A

helps business t grow
increase sales
increassing market-have more people to sell to
reduce costs as prodcution costs may be cheaper in forgein country
allows a firm to obtain first hand knowlege about nations legal system, trends etc
can help them overcome issues like tarrifs and quotas

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19
Q

trade liberilisation

A

removes restriction to international trade
international trade can be restircted by trade barriers, things which make trading more difficult and expensive
e.g tarrifs and quotas
reduction or restrction of these barriers =trade liberilastion

19
Q

adv of trade liberilsation

A

any raw materials that firm imports will become cheaper-can allow firm to reduce cots and become more competitive

exporting goods becomes easier and cheaper as more markets to expand to

consumers choice increased as products all around the world

20
Q

dis of trade liberilisation

A

removal of trade barriers reduce cost of imports, domestic firms can be forced out if not competitive, increase unemployment

21
Q

politcial change can make people more open to trade

A

government by change there thoughts on trade liberailsaiton and may change politic system by removing trade barriers to increase globailitaon

22
Q

more people are able to work

A

icnrease in living and workig standards
more women in work
allows firm to internatilly trade and not be as worrie d about a lack of labour in their chosen area

23
Q

protectionsim

A

where goverment protects domestic firms from foreign competition

24
Q

tarrifs

A

tax that has to be payed wHEN certain products are imported into the country

25
Q

quaotas

A

restriction set by governemtn to limit amount of goods coming into a country

26
Q

how do quotas and tarrifs discourage for internatioanl trade

A

imported goods more expensive then dometic ones
limit how much brought into the country
helps domestic firms grow as face less foreign competition

27
Q

dis of trade barriers placed by the goverment

A

restructs consumer choice
consumers have to pay more otherwise

lack of comp removes incencitive for domestic firm to imporve efficency and quality

28
Q

goverment legislation

A

trade sanctions-strongly restict one contry with trading with another

trade embargoes-ban trade with a country all together

can caus rehalition-where the other country restircts trade with your country

29
Q

doemstic subsidies

A

goverment gives sum of money to domestic firms
helps reduce produsction costs, allowing them to have cheaper products then imoroates

30
Q

dis of domestic subsidies

A

cost goveenmnt money which emans may increase tax for people living within the country

31
Q

trading blocs

A

associations betweeen different goverments to promote and manage trade for a particular region

form alliance

memeebrs sign aggremment to remove protectionist barriers between them

helped trade liberilsation by removal of trade barriers

32
Q

adv of a trading bloc

A

cheapest supplier
increases demand for product
fewer regulation between members of trading bloc
can obtain materials, labour and capital

33
Q

dis of trading bloc

A

becomes more expeinsive to imporat products from counteries not in thebloc
means that findign new suppliers outside of bloc can become more expensive

small firms in trading bloc may be forced out of busines due to larger firms in the trading bloc

34
Q

push and pull factors

A

business shoudl assess these before decsiing to trade abroad
trading internationally can be good thing, can be bad thing

35
Q

push factors-negative factors in domestic market

A

push a business away from domestic markets
motivate firm to look at business opporrutnities in other counteries

often threats to a firms profibailty and survival in currect market

include saturation and competiton within the domestic market

36
Q

push factor examples

A

saturation and competition

saturation-all conusmer demand is being met
overcrowded, few ooportunites for sals growth
when this happens, firm might move to emeging market
moving to unsaturated overseas market can increase sales
e.g starbucks becomign staurated in US so moving to other counteries

competition-may be less competition in firms abroad, may ebpushed out due to high levels of comp in deomestic firms and force firm to move abroad

37
Q

pull factors-postive factors in oversea markets

A

something which makes it attractive for business to trade abroad
liekly to be opportunities

risk-reduces risk of downturn in one market
more bbusiness spreads itself, more stabel ti will be
e.g need for baby produts reduced in one country

economies of scale-expanding abroad will reduce their unit cost
more proftable markers
lwoer production costs
lower material costs

38
Q

why might moving abroad increase a products life cycle

A

product in ine country may be at different stage of product life cycle then it is in another

might be in mature stage in domestic firm but growth stage in emerging firm

may eb result of extenstion stretaegies of product life cycke

39
Q

offshoring

A

moving parts of a business to cheaper counteries

locating some of theri departments overseas
most often move to counteries with cheaper lo=abour costs and emerging econmies

40
Q

adv of offshoring

A

cuts costs

41
Q

dis of offshoring

A

bad for repution of bsuiness
they men they reshore-move departments back to original country
busnesses who trat staff overseas pporly, may get bad repsutuion
backlash for consumers
if enveyhtig made i same country, makes it easier to control
distributiona is cheaper and more effiecient

42
Q

outsourcing

A

business contracts out acitivies to other busiensses rathen then doing them in house
may do this to deal with increase in demand
e.g it, advertising may be in same country
or maybe offshore outsouring, use business thats abroad

43
Q

adv of outsouring

A

specialised knowlege
dont have to pay for permamnt staff onlyneed them occasioanly so reduces costs

44
Q

dis of outsourcing

A

you cant mamge nd control the quality
people in other business may make products of a lower quality meanign bad repuation of bsuiness

runover mr smith paper 1 (2 decks)

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