Political and economic decision-making

Question 1

What is trade?

Answer 1

Good is that is of a specific standard + prompt payment according to the trading agreement

Question 2

Why do governments regulate cross-border trade

Answer 2

As governments recognise the benefits of increasing trade phase for economic growth employment and taxation revenue

Question 3

What is a potential disadvantages from cross border change

Answer 3

Domestic companies may become overspecialised
Competition from abroad may lead to collapse of domestic firms

Question 4

What is a UK example of a company coming over specialised

Answer 4

UK specialisation of financial services – which was hit by the 2008 global crash

Question 5

What is protectionism?

Answer 5

The name pose taxes and tariffs On imported goods, to protect the trade from competition – this is called protectionism

Question 6

What did the USA and the UK think was the best way to combat the spread of communism

Answer 6

Accelerate economic development by the establishment of three main IGO’s

Question 7

What are two main processes that IGO want to promote in terms of helping globalisation

Answer 7

Foreign direct investment
Free trade

Question 8

What is foreign direct investment

Answer 8

Controlling ownership in a business enterprise in one country by company or organisation in another
investment of money or technology by a company or country

Question 9

What must governments wishing to receive investment in their economies from abroad do

Answer 9

They must make it legal for foreigners to own and control business/property in the country

Question 10

What is inorganic FDI

Answer 10

When a foreign form buy as company in another country

Question 11

What is a UK example of inorganic FDI

Answer 11

The UK received £12 billion of FDI when Kraft foods purchase Cadburys in 2010

Question 12

What is organic FDI

Answer 12

Where are foreign investment expand the operation of an existing business in a foreign country

Question 13

What is an example of organic FDI

Answer 13

In 2015 Nissan invested £100 million in its existing car plant in Sunderland to produce the next generation of its “Juke“Car

Question 14

Why would national government encourage FDI

Answer 14

Bring skills
Economic growth
job creation
productivity

Question 15

How the uk encourage FDI

Answer 15

Subsidise for research and development
Tax‘ holidays‘ Or other tax concessions

Question 16

What is privatisation

Answer 16

Transferring ownership of a business, agency, service or property from the public (government – controlled) sector to the private sector

Question 17

What is liberalisation

Answer 17

Reducing/remove rules restricting economic activity and companies

Question 18

Why do governments to liberalisation

Answer 18

As they think that rules make businesses inefficient, and reduce motivation and innovation

Question 19

What is a trade bloc

Answer 19

 A type of intergovernmental agreement, where are used to trade in a world region are Or eliminated in the participating states

Question 20

What are the aims of trade blocks

Answer 20

Promote free trade between all member nations by removing trade barriers
Try to make trade between member nations as easy as possible
Protect trade in the group by placing trade barriers on trade from outside block


Question 21

In what ways Do trade blocs help globalisation?

Answer 21

Encourage more trade between member  nations
Often it leads To intratrade block trade deals

Question 22

How can trade blocks negatively affect globalisation?

Answer 22

They can reduce trade outside the block slowing down global flows and leading poor nations isolated
They can lead To trade wars between trade blocks reducing global flows

Question 23

What are the advantages of the larger size of the market

Answer 23

Largest population to sell goods to
Higher population = more sales
More sales = more products made

Question 24

What is comparative advantage

Answer 24

Easier to trade different goods and services due to the restrictions so They can concentrate on making what they are good and trade for things are not good at

Question 25

What does ASEAN stand for

Answer 25

Association of the south east Asian Nations

Question 26

When was the ASEAN founded

Answer 26

Eighth of August 1967 in the Bangkok declaration

Question 27

How many nations are part of ASEAN

Answer 27

10 nations

Question 28

What are some of the nations are part of the ASEAN

Answer 28

Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. 

Question 29

What are some weaknesses of the ASEAN trade Block

Answer 29

Four major weaknesses
1. Tendency to prioritise national over regional interests
2. Weak leadership
3. Ineffective bureaucratic structure
4. Purely copying the western approach

Question 30

What are some strengths of the ASEAN trade bloc

Answer 30

Reduces trade barriers between member states that’s helping improve economic growth in the region
Promoting regional peace and stability of its members

Question 31

What were the bra– Wars

Answer 31

In 2006 the EU banned imports of Chinese Underwear on the basis that the annual Quotas have been met And they were jeopardising EU clothing companies

Question 32

What Decisions did the UK government made in the 1980s? (trade)

Answer 32

Remove trade barriers and let some industries collapse – trade Liberalisation

Question 33

How did the UK government encourage economic growth? (1980’s)

Answer 33

Taxbreaks-trade liberalisation
Privatisation

Question 34

What decision did China make in 1978

Answer 34

The open door policy allowing investment of FDI from Western TNCs

Question 35

Why did special economic zones attract European USA market

Answer 35

As they have tax incentives and cheap labour

Question 36

How has China’s economy changed since the open door policy began? (allowing it to do)

Answer 36

China is now economically developed enough to have TNCs doing major outward FDI

Question 37

What role does China play with global FDI

Answer 37

China is the biggest sender and receiver of FDI

Question 38

How did government backing help attract FDI in China

Answer 38

Many Chinese TNCs will do business which is partly backed by the state reducing risk of loss for TNCs

Question 39

Why did good infrastructure in China attract so much FDI

Answer 39

As there is mega buildings, roads, reliable water and electricity and Migrant employees to come and work(cheap)
All in place and efficient keeping costs low for TNC

Question 40

Why was political stability important receiving FDI in China

Answer 40

Communist Party has been passed since 1949 stability reduces the risk for TNCs

Question 41

why are cheap goods an important for China receiving so much FDI

Answer 41

Low price so able to outsource manufacturing to far off places and still make money

Question 42

Why was cheap skilled labour important for China seen so much FDI since 1978

Answer 42

Labour is cheaper than in the EU And USA reducing cost and maximising profits

Question 43

Why is China as an emerging market important increase the FDI since 1978

Answer 43

As it is a huge potential market so good to us today is a population of 1.34 billion people which is huge attractive TNCs

Question 44

What is a special economic zone or SEZ

Answer 44

Geographical region that has economic and other laws that are more free market orientated Than a country’s typical or national laws

Question 45

What is the most successful SEZ China

Answer 45

Shenzhen has developed from a small village into the city with a population over 10 million won in 20 years

Question 46

What do SEZ’s do

Answer 46

manufacturing areas were taxes are reduced as an incentive for companies to offshore outsource manufacturing