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Business A Level > Term 4 > Flashcards

Term 4 Flashcards

1
Q

International trade definition

A

Operates in one county but sells to others across borders

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2
Q

Globalisation definition

A

Increased integration and interdependence of national economies

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3
Q

5 reasons why international trade exists

A
  • reduce costs and efficiency
  • facilitate economic growth
  • enable specialisation of country
  • variety
  • Avoid conflict
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4
Q

How does international trade reduce costs

A

In a larger market, producing more and gain economies of scale

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5
Q

How does international trade facilitate economic growth

A

Access to an increased pool of customers, thus firms generate more revenue, GDP increase

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6
Q

How does international trade allow specialisation

A

A country can produce one product/service on high quantity and imports others

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7
Q

How does international trade increase variety

A

This enables countries to obtain products they can’t produce themselves or only could at a high cost

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8
Q

How does international trade reduce conflict

A

Nations relying on each other for trade are less likely to encounter conflict

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9
Q

What is the purpose of trade barriers (government POV)

A

It wills reduce deficit, as nations imports less due to cost of tariffs

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10
Q

Evaluation points of reasons for trade barriers

A
  • Strong currency will make exports less attractive

- Consumers may want to import

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11
Q

Factors to consider when trading internationally

A
  • Language differences
  • Exchange rates
  • Cultural differences
  • Logistics
  • Buying habits
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12
Q

3 examples of relationship between globalisation and international trade

A
  • increased communication and awareness of business worldwide increases international trade because it allows investors to access opportunities more easily
  • Increased competition, need cheaper resources, causing increase in international trade due to purchasing from abroad
  • improvements in infrastructure, increasing international trade as transportation is easier/faster
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13
Q

Free trade definition

A

Trade without trade barriers

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14
Q

Advantages of free trade

A
  • Reduced business costs (no tariffs)
  • Gain EOS more easily due to no quotas
  • Increased competitiveness due to more attractive exports
  • Cheaper price for customer (no tariffs)
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15
Q

Disadvantages of free trade

A
  • Markets more saturated due to more competition
  • Decrease in sustainability/ increase in environmental concerns
  • loss of jobs domestically
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16
Q

What is a trade bloc

A

A group of countries within a particular geographical region that protect themselves from imports from non-members

17
Q

3 benefits of being part of a trade bloc

A
  • Access to larger market with more customers
  • Potential for EOS
  • Access to capital from foreign institutions e.g. higher interest rates abroad
18
Q

Disadvantages of being part of a trade bloc

A
  • Can’t make own deals with other nations, has to abide by trade bloc deals
  • Loss of competitiveness if other nations in trade bloc have lower costs eg labour costs
  • Free movement of capital could mean domestic firms can be taken over by foreign investors
  • Have to follow laws and regulations
19
Q

Emerging markets definition

A

A country achieving rapid growth and industrialisation

20
Q

What is BRICS

A

Classically thought of emerging markets

Brazil, Russia, India, China, South Africa

21
Q

Opportunities presented by emerging markets

A
  • Creates new markets, with more customers and higher disposable incomes
  • Take advantage of a lack of legal constraints
  • Cheaper labour for production
  • Production closer to markets they serve so more efficient transport
22
Q

Threats of emerging markets

A
  • Loss of jobs in developed economies
  • Less competitiveness for developed economies firms
  • They become more self-sufficient so less reliant on developed economies exports
23
Q

Digital revolution definition

A

The shift from analog and mechanical technology to digital technology

24
Q

Examples of digital technology

A
  • Digital storage of data
  • Communication such as email and video conferencing
  • Internet to sell, advertise and access bank accounts
25
Q

The information age definition

A

A time when large amounts of information is widely available

26
Q

Impacts of increase in information (eg locations services on google)

A
  • Time sensitive promotions
  • Staff planning
  • Customer flow improves
  • Stock Control
27
Q

Opportunities of digital revolution

A
  • Cost saving (access info at little cost)
  • More efficient advertisement
  • Easier to receive feedback and therefore improve operations
28
Q

Threats of digital revolution

A
  • Constantly updating
  • Training costs and time for staff to adapt
  • Increase in bad press as publicity is more widely available
29
Q

Factors that will cause a variation in the impact of the digital revolution

A
  • The market/industry
  • How competitions also respond to tech
  • Type of product or service being sold
  • Budget of the firm
  • Demographics of consumers

Business A Level (16 decks)

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