Unit 3

Question 1

Globalisation?

Answer 1

Growing integration and interdependence of national economies.

Question 2

Which factors have facilitated this level of imports?

Globalisation basically

Answer 2

There is a reduction in trade restrictions(tariffs and quotas)
Lower costs of production abroad
Ease of transport

Question 3

Other factors facilitating globalisation:

Answer 3

• internet and rise of e-commerce
• smart phones(communication)
• easy movement of capital(money)
• multinationals

Question 4

multinationals meaning:

Answer 4

A company which has operations in more than one country

Question 5

International trade:

Answer 5

A firm which operates in one country and trades internationally

Question 6

why do firms want to become multinational?

Answer 6

benefit from economies of scale as production increases
ability to take advantage of the lack of legal constraints
They can enter new markets where there is less completion
Ability to take advantage of lower wages

Question 7

multinationals: positives

Answer 7

Positives
Provides employment opportunities in LEDC
More skills in local area
Leads to investments in infrastructure
Utilisation of local resources to supply factories

Question 8

multinationals negatives

Answer 8

• employment often in exchange for low wages
• jobs are low skilled(no long term future)
• working practices can be unsafe
• child labour which can mean children miss out on education
• local businesses can be driven out of the Market
• income goes back to the domestic country where the multinational is based.

Question 9

social factor

Answer 9

changes in society affecting business demand

Includes demographics of population groups e.g. size, incomes, age, ethnicity

Question 10

Changing social factors:

Answer 10

• social habits i.e. people eating out more
• changes int he employment pattern( more part-time)
• the changing role of women in the workplace
• changing attitudes to work
• the grey pound i.e. older people are wealthier with property, pensions, savings

Question 11

Technological factors

Answer 11

Computer hardware/software
Internet connectivity
Wireless charging(fibre optic/4G/5G)
Applications 
Devices such as tablets

Question 12

Technological factors pros

Answer 12

• systems are usually faster and more efficient
• communication is easier
• in the long run, costs may be reduced due to efficiencies
• remote working is possible
• reduces need for physical storage
• may offer employees new skills

Question 13

Technological factors cons:

Answer 13

• high initial cost
• may lead to job losses
• not always reliable
• staff will need to be trained(cost implication)
• businesses will need to spend to keep data secure
• may cause demotivation as workplace resists change

Question 14

Ethical meaning

Answer 14

concerned with the judgement of whether something is morally right or morally wrong.

Question 15

Pros of being ethical

Answer 15

attracts new customers(more sales revenue)
Attracts new and better quality employees
better reputation
Encourages existing employees to keep working there
Encourages investment due to higher revenue/profits

Question 16

Cons of being ethical

Answer 16

Increased costs
Danger of building up expectations
Less competition on price
Could lead to less output(staff cannot work beyond a certain no. Of hours
(No overtime)

Question 17

Environmental concerns with businesses

Answer 17

Air pollution/carbon emissions-industrial processes,planes,cars
River or sea pollution-chemical/oil leaks and plastic
Land pollution- deforestation
Noise pollution- motorways and airports
Congestion- pollution from vehicles and land used to try ease congestion

Question 18

How to be more sustainable:

Answer 18

Use video call meetings
Through recycling schemes
Reducing plastic packaging 
By choosing local suppliers who are sustainable
Use renewable energy sources

Question 19

The economic indicators:

Answer 19

GDP and economic growth
Inflation
Interest rates
Exchange rates
Levels of unemployment 
Balance of payments

Question 20

High inflation:

Answer 20

• makes UK exports more uncompetitive(prices are higher)
• less multinational investment because it costs more in a country of high inflation. Multinationals would rather invest in an LEDC
• high inflation causes uncertainty around profits( profits are worth less)

Question 21

Unemployment. You must be:

Answer 21

• out of work
• available for work
• actively seeking work

Question 22

Interest rates. When high?

Answer 22

• the pound will be more demanded. HOT MONEY- states that foreign investment banks/ people are more likely to covert their currency to the pound in a UK bank when interest rates are high
• strong pound

Question 23

Weak pound

Answer 23

Weak pound imports dear exports cheap

Improves the balance of payments as UK exports will be more competitive and therefore more demanded

Question 24

To find the trade surplus/ deficit what do u do?

Answer 24

Exports - imports

Question 25

Supply side measures:

Answer 25

• Supply side policies are intended to increase output in an economy
• include improving employee skills, cutting corporation tax and reducing welfare benefits
• subsidies to start-ups

Question 26

Recession/slump

Answer 26

• number of firms in the supermarket sector will suffer. However discounters like Lidl and Aldi will thrive as people intend to buy cheaper essential products in a dull economic period

Question 27

Fiscal policies

Answer 27

Loose fiscal(increase gov.spending but lower taxes)
Tight fiscal (decrease gov.spending but increase taxes)

Question 28

Monetary policy. What is it?

Answer 28

Used by the Bank of England/MPC
Changes interest rates in order to manipulate demand in the UK
A change in interest rate takes 18 months to take full effect