Short Questions Unit 7

Question 1

What is the formula for balance of trade

Answer 1

Exports - imports

Question 2

Name an import in ireland which could not be substituted with a home produced good

Answer 2

coffee- Ireland has an unsuitable climate to grow coffee plants. We do not have the correct weather conditions

Question 3

Explain import substitution

Answer 3

This means buying Irish goods instead of buying foreign goods. This increases sales for indigenous businesses in Ireland. Ex: Buying Irish potatoes instead of Spanish potatoes

Question 4

Explain privatisation

Answer 4

This is when a state owned enterprise is sold to a private entrepreneur or business. The government no longer runs the company or has any say in how it’s run

Question 5

Explain deregulation

Answer 5

This is gradually opening up more and more countries to international trade. It’s process of removing all the government rules and regulations that prevent free trade between countries

Question 6

Explain the invisible exports and provide one example in Irish economy

Answer 6

These are services sold to a foreign country that brings money into Ireland. Ex: British tourists staying in a hotel in Dublin

Question 7

Explain protectionism

Answer 7

When countries use barriers to trade to restrict foreign imports and/or increase their own exports to help their own indigenous businesses do well. They are imposed by the government ex: tariff

Question 8

Explain your understanding of the term trading bloc

Answer 8

A trading bloc is a group of countries who make a formal agreement with each other to freely buy from and sell to each other without any barriers to trade Ex: European union

Question 9

Illustrate what is meant by the term invisible imports with reference to the Irish economy

Answer 9

When Irish businesses and people buy services from foreign countries and money goes out of Ireland Ex: British singer performing in Ireland

Question 10

Explain a Quota

Answer 10

A limit on the amount of foreign imports a country will allow. It is put in place to reduce the number of imports and to help indigenous businesses

Question 11

Explain a tariff

Answer 11

A tax a country adds to the price of foreign goods to make them dearer so they will not sell as well

Question 12

Explain the term open economy

Answer 12

An open economy is one which imports and exports freely with the rest of the world. A significant amount of income is earned from exports and spent on imports. It relys on international trade

Question 13

Outline the possible impact of an open economy for irelands economic development

Answer 13

competition from foreign firms forces Irish businesses to keep their costs low so makes their businesses better and more competitive

Question 14

Give two examples of trading blocs

Answer 14

European Union

North American Free Trade Agreement (NAFTA)

Question 15

Explain inflation

Answer 15

The increases in the cost of living over a period of time

Question 16

Who sets the bank interest rates for eurozone member

Answer 16

European Central Bank

Question 17

When the euro increases in value against the dollar the price of irish exports in the Us will increase or decrease

Answer 17

increase

Question 18

Who elects the EU commission

Answer 18

EU citizens

Question 19

What does the Eurozone mean for goods and services

Answer 19

Free movement of goods, services, people and capital

Question 20

Explain a directive

Answer 20

A law applicable to all EU member states that must be obeyed. It sets out a desired result to be achieved by a certain date. They must change their own laws to implement the directive.They have the freedom to change it slightly as long as required result is achieved

Question 21

Who is the main decision making body of the EU

Answer 21

The council of the European Union

Question 22

What bodies are in the co-decision procedure of the EU

Answer 22

European Parliament shares legislative power with the council of the European Union

Question 23

Explain the role of the European commission

Answer 23

Upholds the interests of the EU as a whole. It manages day to day business like implementing policies or spending EU funds. Consists of commissioners each in charge of a different area

Question 24

Explain a regulation in the context of the EU

Answer 24

An EU law all members must obey with immediate effect. This law takes absolute precedence over national law

Question 25

What is the role of the court of auditors

Answer 25

Ensures the EU budget is spent efficiently

Question 26

Explain the role of the european court of justice

Answer 26

Is responsible for ensuring the correct interpretation and application of EU laws by member states

Question 27

Explain the council of ministers in the EU

Answer 27

Where national ministers from each EU country meet and adopt laws and coordinate policies. It is attended by one minister from each of the EU’s national governments

Question 28

List four institutions of the EU

Answer 28

Council of the European union
European parliament
European commission
European court of auditors

Question 29

The single european market helps businesses in what way

Answer 29

Allows the free movement goods, labour and capital throughout the EU. It is the worlds largest free trade area with no barriers to trade between countries. Businesses can sell anywhere, Eu citizens can work or live anywhere and EU citizens can invest money anywhere

Question 30

Explain what is meant by a multinational company with an example

Answer 30

A business with a head office in one country and branches or factories in a number of other countries. The head office controls the entire business Ex: dell

Question 31

Explain your understanding of a Global Business with an example

Answer 31

A global business is a business that expands into other countries to increase profits. They sell around the world and have firms all over to sell world-wide ex: toyota ex: coca-cola

Question 32

Explain a global product with two examples

Answer 32

A product that is sold throughout the world. It is globally recognised with a common brand name across the world ex: Coca-cola, snickers

Question 33

Explain the term global marketing

Answer 33

The selling of the same product all over the world using a global marketing mix. The global business concentrates on the similarities across world markets. If the same marketing mix is used in each country is a standarised marketing mix