Unit 7 Flashcards
What are visible imports?
Physical goods that Irish businesses & individuals buy from foreign countries. Money leaves Ireland.
EG: Medical equipment.
What are invisible imports?
Services that Irish businesses and individuals buy from foreign countries. Money leaves Ireland.
EG: An Irish person attends a concert in 3 Arena by US artist Olivia Rodrigo.
What are visible exports?
Physical goods that Irish businesses & individuals sell to foreign countries. Money comes into Ireland.
EG: Medicine - Pfizer.
What are invisible exports?
Services sold by Irish businesses to consumers from foreign countries. Money enters Ireland (Economy).
EG: Niall Horan plays a concert in the USA.
What is import substitution?
A domestic producer starting to produce a product that was previously imported. Money comes into the economy.
EG: Cheese.
What is protectionism?
Implementing trade barriers to foreign businesses to insulate home industries. Government & trading blocs restrict imports.
Why is protectionism implemented?
To raise revenue through tariffs and protect domestic jobs under threat from high competition.
What are examples of protectionism?
Barriers to trade such as quota, tariff, embargo, and subsidy.
What is a quota?
A physical limit on the number of products that may be imported. Discourages & encourages more sales of homeland products.
EG: Quota on clothing from China.
What is an embargo?
A complete ban on all imports/exports from/to a particular economy, imposed for political or environmental reasons.
EG: USA has an import/export ban against Syria.
What is a tariff?
A tax placed on imported goods that makes them more expensive and encourages people to buy Irish goods.
EG: Tax on US sweets.
What is free trade?
Enables countries to buy & sell each other’s goods & services without barriers in place.
EG: No tariffs or quotas.
What is a trading bloc?
A group of countries that share a common free trade area, removing barriers to trade between countries.
EG: The EU & NAFTA.
What does NAFTA stand for?
North American Free Trade Agreement.
What does the EU stand for?
Single European Market (SEM).
What is an EU Directive?
A law that applies to all EU member states, which must be implemented within a certain time frame. Each state has the autonomy to choose implementation.
EG: WEEE Directive - return old electronics to manufacturer.
What is an EU Regulation?
A law introduced and enforced in the same way across all EU states, with EU laws taking precedence over national laws.
EG: GDPR.
Which EU institution imposed laws?
EU Commission.
What is the balance of trade?
Visible exports minus visible imports, resulting in a surplus or deficit.
What is the balance of payments?
Total exports minus total imports, resulting in a surplus or deficit.
How can a trade deficit be overcome?
By increasing exports and reducing imports.
What is a Transnational company/Multinational company?
A business with headquarters in one country and branches of the firm in another country.
EG: Glanbia and Circle K.
What aided the development of TNCs?
Advances in transport, advances in tech, free trade agreements, and economies of scale.
How did advances in transport aid TNCs?
Ships and aeroplanes are capable of carrying larger loads and can travel at faster speeds.
How did advances in tech aid TNCs?
Email has made it easier for firms to communicate overseas and thus set up TNCs, allowing for quick decisions.
What is the role of free trade agreements in TNC development?
They allow goods to move between countries with fewer barriers.
EG: The European single market allows Irish goods to go to EU countries without quota or tariff.
What are economies of scale?
This allows businesses to trade more efficiently as buying stock in large amounts leads to discounts, thus lowering business costs.
What are reasons why MNCs locate in Ireland?
Low corporation tax, highly skilled labour, high reputation, English language, and government assistance.
What is the corporation tax rate in Ireland?
The lowest in the EU at 12.5%, encouraging MNCs to keep more of their profits.
Why is highly skilled labour attractive to MNCs in Ireland?
MNCs want an educated workforce, including new graduates, many of whom work in R&D.
EG: at Google.
How does Ireland’s reputation impact MNCs?
Ireland has gained a remarkable reputation for being an effective area to do business, encouraging more MNCs to locate.
EG: Google.
Why is the English language important for MNCs in Ireland?
Ireland’s main language is English, making it attractive for MNCs when trading, with many Irish people also being bilingual.
What role does government assistance play in attracting MNCs to Ireland?
The IDA attracts FDI by providing information and support, including IDA business parks.
What are positive impacts of MNCs on Ireland?
They provide employment, increase reputation, increase profits, and offer expert knowledge.
How do MNCs provide employment in Ireland?
They provide direct employment to Irish people in various fields such as tech, science, and business.
How do MNCs enhance Ireland’s reputation?
MNCs improve Ireland’s reputation as a good area for business, attracting more MNCs.
How do MNCs increase profits in Ireland?
They buy goods and services from Irish businesses, creating employment and increasing profits.
EG: Transport and equipment.
What expert knowledge do MNCs provide?
MNCs are knowledgeable, allowing Irish managers to learn and adapt similar ideas.
What are negative impacts of MNCs?
They create competition, repatriate profits, and may lead to over-reliance on MNCs.
How do MNCs create competition in Ireland?
MNCs can dominate the market due to their resources, potentially causing indigenous firms to close.
What is profit repatriation?
Money earned from low tax in Ireland is spent at the firm’s headquarters.
What is the risk of over-reliance on MNCs in Ireland?
The Irish may become over-dependent on MNCs, discouraging the establishment of indigenous firms.
What is a global business?
A global business sells its goods and services all over the world using a standardized or adapted marketing mix.
What are reasons for developing global businesses?
To spread risk, achieve economies of scale, and utilize e-commerce.
How does spreading risk benefit global businesses?
Operating in many countries reduces dependence on a single market.
What are economies of scale in global businesses?
Savings made by operating on a larger scale, leading to reduced business costs.
EG: discounts.
How does e-commerce benefit global businesses?
Goods and services can be sold online, reducing the need for physical stores and associated costs.
What are positive effects of globalization on the Irish economy?
Increased consumer choice, increased employment, a growing labour force, and increased economic growth.
How does globalization increase consumer choice in Ireland?
Irish consumers have access to a greater variety of goods and services at competitive prices.
How does globalization increase employment in Ireland?
It provides direct and indirect employment, leading to more disposable income and demand for services.
What impact does globalization have on the labour force in Ireland?
Increased demand for labour leads to more job vacancies, reducing emigration.
How does globalization contribute to economic growth in Ireland?
Businesses can sell products in larger markets abroad, leading to increased production and economic growth.
What are negative effects of globalization on the Irish economy?
Increased competitiveness, lower taxes for global businesses, and profit repatriation.
How does globalization affect competitiveness for Irish firms?
Increased demand for foreign products can threaten Irish firms, leading to closures.
Why do global businesses pay less tax in Ireland?
Due to low corporation tax, they can allocate funds elsewhere.
What is profit repatriation in the context of globalization?
Profits earned in Ireland often return to the firm’s headquarters and are not reinvested locally.
What is a standard marketing mix?
Using the same marketing mix in all markets, such as the same price, product, place, and promotion.
What is an adapted marketing mix?
Changing some elements of the marketing mix, like price and promotion, to suit market differences.
What are the components of the global marketing mix?
Global product, global price, global place, and global promotion.
What factors influence global product decisions?
Language, culture, and tastes.
What factors influence global price decisions?
Cost of living, level of tax, local price levels, and exchange rates.
What are the methods of global place for selling?
Agents, licensing, and direct export.
What is the typical approach to global promotion?
Usually remains unchanged to keep costs low, with minor adjustments for language.
What are the components of global promotion?
Advertising, public relations, sales promotions, and personal selling.
What is the importance of global marketing?
Increased sales, lower costs, and improved quality.
How does global marketing lead to increased sales?
It raises brand awareness across the globe.
How does global marketing help lower costs?
Standardized marketing benefits consumers worldwide.
How does global marketing improve product quality?
Global businesses invest in R&D to produce high-quality products.
