(PAPER 3) 4.1.2 international trade and business growth Flashcards
import definition
products and services produced abroad and consumed domestically
export definition
products and services produced domestically and consumed abroad
reasons for firms to export
to reach more markets and therefore customers
drawback of firms exporting
costly- have to pay for transport and possibly tariffs ( a tax or duty to be paid on a particular class of imports or exports)
benefit of importing goods
more choice for consumers and businesses
specialisation definition
a business strategy where a business chooses to focus on a limited range of goods and services
why would a country specialise in trade in accordance to its competitive advantage
efficiency benefits- leading to a lower cost per unit
benefits of specialisation
+ increase in quality
+ lower costs- less training & less wastage
drawbacks of specialisation
- can be repetitive
- risky to focus on a limited range
FDI definition
when a business purchases non-current assets in another country
FDI definition
when a business purchases non-current assets in another country
2 methods of FDI
- branches, offices, stores
- merges and takeovers
benefits of FDI for a business
+ access to new markets
+ lower costs- tariffs and transport
+ access to natural resources
benefits of FDI of the country
+ provides job opportunities
+ increases standards of living
reasons why a country may not want FDI
- more competition for domestic businesses
- negative externalities
