International Trade & Globalisation Flashcards
What is globalisation
Globalisation is the process by which the world becomes interconnected as a result of increased trade and cultural exchange.
Why has globalisation developed? Give three reasons.
- Improvements in technology & communications
- Improvements in transportation
- Development of online payments
What is a global company?
A global company is one that operates all over the world.
Why are all global products identical?
Global businesses sell standardised (the same) products all over the world. This allows for mass production and lower cost. However, some global products may be changed in different countries to reflect culture, legislation etc.
What is international trade?
International trade is the importing and exporting of goods and services between different countries.
What is importing?
Importing is buying products or services from other countries.
What are the main products that Ireland imports?
- Petrol / Oil
- Cars
- Machinery
- Clothing
Why does Ireland Import Goods and Services? Give three reasons.
1. Climate: Ireland does not have the right climate to grow certain products e.g coffee
2. Choice for Consumers: Irish consumers want to have a variety of goods and services that they can buy and choose from e.g fruit.
3. Natural Skills: Certain countries have people with the skills to make certain products e.g Champagne
What is exporting?
Exporting is selling goods or services to other countries.
What are the main products that Ireland exports? List four products.
- Food
- Animal products
- Medical Devices
- Pharmaceuticals
Why does Ireland Export Goods and Services? Give 3 reasons.
1. Increased sales / profits: Irish firms can increase their sales and profits by exporting their excess output to a foreign market.
2. Employment creation: Exporting helps maintain jobs in Ireland. The more we sell, the more people we need to employ to make the goods.
3. Demand: There is a demand for Irish products by consumers abroad e.g beef
Differentiate between visible imports and visible exports.
Visible imports are the physical products that Ireland buys other countries e.g cars, oil, fruit.
Visible exports are the physical products that Ireland sells to other countries e.g meat, dairy products.
Differentiate between invisible imports and invisible exports.
Invisible imports are the services that Ireland buys from other countries e.g Irish people going on holiday abroad, foreign music bands performing in Ireland.
Invisible exports are the services that Ireland sells to other countries e.g. Insurance, banking, tourism.
Give 3 benefits of international trade for Ireland.
1. Increased Sales: the Irish market is quite small. By exporting, Irish businesses can increase sales and sell to bigger markets.
2. Spread Risk: A business can spread their risk by not relying on their local market. If a downturn occurs in one market, they can focus on other more profitable countries.
3. Raw Materials: Irish businesses need to import some raw materials as we do not produce them in Ireland e.g oil
Give 3 challenges of international trade for Ireland.
1. High Transport Costs: As ireland is an island, transportation is more difficult and more expensive for Irish exporters as goods can only be transported by ship or plane.
2. Languages: Irish exporters may need to make their websites and advertisements available in many languages to appeal to customers in different countries.
3. Competition from Low-Cost Economies: Irish wages are quite high which means it can be cheaper to produce goods in other countries e.g Africa.
