(PAPER 3) 4.1.2 international trade and business growth Flashcards

1
Q

import definition

A

products and services produced abroad and consumed domestically

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2
Q

export definition

A

products and services produced domestically and consumed abroad

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3
Q

reasons for firms to export

A

to reach more markets and therefore customers

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4
Q

drawback of firms exporting

A

costly- have to pay for transport and possibly tariffs ( a tax or duty to be paid on a particular class of imports or exports)

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5
Q

benefit of importing goods

A

more choice for consumers and businesses

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6
Q

specialisation definition

A

a business strategy where a business chooses to focus on a limited range of goods and services

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7
Q

why would a country specialise in trade in accordance to its competitive advantage

A

efficiency benefits- leading to a lower cost per unit

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8
Q

benefits of specialisation

A

+ increase in quality

+ lower costs- less training & less wastage

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9
Q

drawbacks of specialisation

A
  • can be repetitive

- risky to focus on a limited range

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10
Q

FDI definition

A

when a business purchases non-current assets in another country

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11
Q

FDI definition

A

when a business purchases non-current assets in another country

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12
Q

2 methods of FDI

A
  • branches, offices, stores

- merges and takeovers

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13
Q

benefits of FDI for a business

A

+ access to new markets
+ lower costs- tariffs and transport
+ access to natural resources

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14
Q

benefits of FDI of the country

A

+ provides job opportunities

+ increases standards of living

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15
Q

reasons why a country may not want FDI

A
  • more competition for domestic businesses

- negative externalities

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