Global business Flashcards

Question

Describe the main functions of the World Trade Organisation

Answer 1

- Trade negotiations - Implementing and monitoring - Settling trade disputes - Building membership

Answer 2

Access to huge markets lower costs access to labour reduction taxation

Answer 3

Competition the power of MNC's globalisation

Answer 4

A radical change in government may lead to their trade policies being more liberalised, this increases globalisation as it makes it easier for businesses to import and export in that given nation

Answer 5

As costs of transport decreases, it makes it easier for goods to transported cheaper as well as making it easier for people to travel

Answer 6

MNC's drive globalization by expanding markets, investing globally, transferring technology, creating supply chains, promoting efficiency, and fostering cultural exchange.

Answer 7

- Investment flows create jobs and stimulates economic development in the given country - FDI allows businesses to expand into other nations, increasing global trade and business activity - FDI can bring advanced Technology and expertise to local economies, which can boost productivity and competitiveness of domestic businesses on a global scale - FDI may prompt governments to reduce trade barriers

Answer 8

- Increase the global labour forces -it may bring new skills to nations Migrants may send remittance, which increases interdependence between the country of origin of the migrant workers and the migrated country.

Answer 9

The money sent back to their country of origin by overseas workers

Answer 10

Trade between nations without restrictions from barriers

Answer 11

Structural change is a shift or change in the basic ways a market or economy functions or operates This means that some economies may focus on services sectors and not as much on primary and secondary sectors like agriculture and manufacturing. Relaying on imports, which provides an opportunity for foreign firms to expand their global market

Answer 12

- Better access to huge markets - Lowers costs -Access to labour -Reduced taxation

Answer 13

- Reducing the number of imports into the country (becoming less reliant on foreign markets) - Reduce the foreign competition For domestic businesses →As competition may be taken away demand/market share would increase for domestic businesses →Loss of sales for domestic businesses - Protect employment in domestic market - Tax revenue for the government - Protect/help infant industries grow and develop

Answer 14

are taxes or duties imposed by a government on imported or exported goods

Answer 15

- Steel imports - Agricultural goods

Answer 16

Import quotas are limits set by a government on the quantity or value of a product that can be imported into a country within a specific time frame

Answer 17

* Textiles and Clothing: The UK has imposed import quotas on certain textiles and clothing to protect domestic manufacturers from being overwhelmed by cheaper imports. *Fish and Seafood: To support local fisheries, the UK has established import quotas on specific fish and seafood products. *Agricultural Products: Various agricultural products, such as sugar and dairy, have import quotas to maintain a fair market for domestic farmers.

Answer 18

Government legislation refers to laws and regulations enacted by a country's legislative body. These laws govern various aspects of society, including trade, industry, health, safety, and the environment

Answer 19

The EU refusing to allow import of American foods: due to their differing opinions on what is considered “healthy” and safe The Customs (Import Duty) (EU Exit) Regulations 2018: The regulation outlines the imposition of import duties on goods entering the UK, effectively replacing the EU’s Common External Tariff. The UK Critical Imports and Supply Chains Strategy: focuses on building resilient supply chains and safeguarding critical imports By collaborating with businesses and international partners, the UK government aimed to limit unnecessary imports and focus on critical goods essential for the economy, national security, and essential services

Answer 20

Domestic subsidies are financial assistance provided by a government to its local businesses and industries. These subsidies aim to reduce production costs, support growth, and enhance competitiveness

Answer 21

*Subsidies for Green Energy: The UK government provides financial assistance to renewable energy projects, encouraging the development and use of green energy sources such as solar, wind, and hydroelectric power. *Subsidies for Small Businesses: To support small and medium-sized enterprises (SMEs), the government offers grants, low-interest loans, and tax relief to help these businesses grow and thrive *Agricultural Subsidies: The government provides subsidies to farmers to promote sustainable farming practices, improve food security, and support rural economies

Answer 22

*In the short term domestic businesses may benefit from the decrease in competition *Will also help improve efficiency and competitiveness of domestic businesses as a result of domestic businesses having extra profits to develop new products/improve production techniques

Answer 23

*businesses are likely to benefit more from free trade as it encourages competition which can motivate domestic businesses to improve efficiency *Trade barriers may attract retaliation from overseas governments. *As if one country imposes traffic on the goods from another, the other country is likely to impose tariffs in return *This may lead to a trade war which will have negative impacts on businesses in both countries

Answer 24

*A group of countries that has signed a regional trade agreement to reduce or eliminate tariffs, quotas and other protectionist barriers between themselves

Answer 25

*27 countries *4.233m km2 *1992 Maastricht treaty changed the European Economic Community (EEC) to the EU. Key changes included * Economic and monetary union * a common foreign and security policy * more power to the European Parliament * a system for developing co-operation between members on justice and home affairs issues *Pressure on members to become a ‘citizen of the union’ *businesses that operate in most EU countries are able to move and compete equally in all other countries in the EU

Answer 26

*ASEAN (Association of south-east Asian nations) *(Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand Vietnam) * Areas of co-operation: * Macroeconomic and financial policy * labour policies, including education and professional qualifications * Infrastructure and communications * E-commerce * regional sourcing (businesses buying more resources from within the trade bloc

Answer 27

*North American free trade agreement *Canada, Mexico and the USA in a free trade zone *covers trade and investment, labour, financial dealings and intellectual property, including common environmental issues. *Agreed to eliminate Tariffs on most manufactured goods and to treat investors of other two countries as domestic investors

Answer 28

*Freeing regional trade may allow individual members to specialise in the areas their country already has advantages in. *Easier to export *Because no tariffs can be added or quotas imposed-increase in sales-more profit/market share *Easier to import *Cheaper materials-costs are lower-high profit margins or lower/competitive prices

Answer 29

*Inefficient producers may be protected from competition. *Which may divert trade away form more efficient producers and potentially harm consumers *Increase in imported goods *creates competition - lose market share *businesses may have to adapt product to sell to other members - increase in costs - lower profits margins

Answer 30

Obtaining goods that cannot be produced domestically (-Many countries are unable to produce certain goods, as a result of lack of natural resources that enable such production -Prompting these countries to trade in order to obtain goods that cannot be produced domestically) Obtaining goods that can be brought more cheaply from overseas: (*Some countries can produce certain goods more efficiently than others *making economic sense to buy goods from other countries if they are cheaper) Excess supplies: (*Some countries have surplus commodities *Meaning countries which have such a large amount of a resource, for example UAE and oil will be more likely to sell excess for cheaper)

Answer 31

*Are negative factors in the existing market that encourage an organisation to seek international opportunities *Forcing businesses to seek overseas markets in which to sell in

Answer 32

*Is a market in which most consumers who would buy a particular product already have it, so there is limited remaining opportunity for growth in sales. *Leading to businesses looking elsewhere to sell their products

Answer 33

*A rise in competitors or high level of competition in domestic market may force businesses to sell abroad. Restrictive and costly legislation *Ford moved to Mexico as a result of high cost of employment Brexit Weak UK/US/EU economies

Answer 34

Increased sales and Profitability * Many businesses want to grow by selling more to existing and new customers * Firms can increase sales by exploiting overseas markets. Economies of scale * increase the scale of production leads to a lower cost per unit of output * increasing size or speed increases efficiency and lowers costs if output rises. Risk spreading * by expanding into other countries and markets, a firm may be able to limit the various risks that it faces e.g. an over dependence on a single market may lead to vulnerability in the short term if that market faces an economic challenge Strong economic growth Large and growing population growing middle classes Less competitive pressure

Answer 35

*involves moving manufacturing or service industries to a location with lower costs *Firms do this to reduce costs and hire workers with particular skills

Answer 36

*Involves moving an entire business function or project to a specialist external provider

Answer 37

* it reduces costs * in order to specialize areas of the business * to focus on the core competences of the business rather than the support functions Labour productivity * firms often want to move operations to where labour is cheaper

Global business Flashcards

Based on the 2023 syllabus (64 cards)