Topic 6: The impacts of global events and ethics Flashcards
What is globalisation
the integration of business industry and society through developments in technology communication and migration
How many countries has HSBC expanded into
65
The international Monetary fund (IMF)
International body of 189 countries that aim to cooperate
What are common critics of globalisation
Undermines local culture
systematic failure
multinational companies rival small business
mergers and accusations can result in redundancy
What is toxic debt
debt with low chance of being repaid with interest
first bank in UK hit by 08 crisis
Northern Rock
What are the effects of globalisation
UK face competition from overseas, better for consumers
UK can expand overseas and have increased employment
What is outsourcing
provider paying another to carry out tasks they previously would’ve done
What is offshoring
moving parts of operations abroad to cut costs
what is economies of scale
cost advantages reaped by companies when production becomes efficient
The global economy
the total of all activity in the national or regional economies of which its composed
exchange rates
The price of a currency compared to another
explain the benefits and drawbacks of a weak and strong pound
Weak pound = better exports worse imports
strong pound = better imports worse exports
What is real economy
demand and supply for products and services
What is an international trade organisation
International bodies try to persuade governments to co-ordinate economic policies
Protectionism
government policies designed to protect a country’s business and workforce
The world trade organisation
160 members goal to ensure trade flows smoothly and freely
what are 3 regional unions and their member status
EU - 27 members
Association of Southeast Asian nations - 10 members
Caribbean community - 15 members, 5 associates
Gross Domestic Product (GDP)
The total value of goods produced and services provided in a country during one year
GDP per Capita
total GDP divided by Population
Overheated Economy
rapid unstable growth which leads to higher prices to meet demands
Boom and Bust cycle
rapid growth followed by failing output
sustainable growth
growth controlled enough to be able to continue into the medium and long term.
Higher productivity
more goods and services with the same resources
How does global uncertainty affect savers
consumers opt for safer investments like guilts
How does global uncertainty affect borrowers
Banks cut borrowing (credit crunch)
consumers more cautious focused on repaying
How does global changes affect employment and earnings
falling growth = falling employment levels = job losses and debt not repaid
How does global changes affect emerging markets
can cause problems for established countries
high price of commodities = high net commodity price
What is BRIC and MINT
Brazil, Russia, India and China
Mexico, Indonesia, Nigeria, Turkey
Runaway inflation
very rapid inflation
How to join Euro zone
Must meet certain standards of fiscal stability, independent central banks, low inflation and rates, established stable currencies.
What does European central bank do
sets base interest rate for euro area
what 3 members joined EU
Estonia 17th member Jan 2011
Latvia Jan 2014
Lithuania Jan 2015
What 5 countries hit hard by crisis in EU
what was there unemployment rates
- Greece - Oct 2014 25.78%
- Ireland - 3 billion bailed out by UK
- Spain - Nov 2014 23.9%
- Portugal - 2012 17%
- Italy - 2014 13.4%
HM Treasury
responsible for setting economic policy
How can natural disasters affect finances
Global warming affects how industry
flooding = higher prices death repairs
volcano eruption Iceland 2010 disrupts flight
What is the jobs of directors and auditors
directors - duty to all shareholders
auditors - duty for accuracy in accounts
What is Jupiter emerging European opportunities fund
fund that invests in new EU markets
What happened due to Pandemic
- lockdowns
- business closures
- reduced spending
- government deficit
The UK Sustainable Investment and Finance (UKSIF)
membership organisation committed to growing sustainable responsibility in UK
What is corporate social responsibility
self regulation to demonstrate social and ethical standards
what are ethical brand and ethical operations
Brand - don’t offend or miss market to anyone
operations - ethical running of day-to-day tasks
Systematic failure
complex interdependent networks that are at risk of huge collapse
project merlin
agreement between the government and the main banks to pay lower bonuses to their employees and make more money available for business loans.
