Globalisation Flashcards
What is globalisation?
A: The process by which businesses start operating on an international scale.
Q: How has globalisation impacted business?
A: It has increased international trade, expanded markets, and allowed businesses to operate in multiple countries.
Q: What is a multinational corporation (MNC)?
A: A company that operates in more than one country.
Q: What are some benefits of globalisation for UK businesses?
A:
Wider markets – Access to more customers.
Economies of scale – Lower production costs.
Labour migration – Access to skilled workers from abroad.
Specialisation – Businesses can focus on what they do best.
Multiplier effect – Creates jobs and boosts local economies.
Q: What is the multiplier effect?
A: When businesses expand, they create jobs, leading to increased spending in the local economy.
Q: What are some drawbacks of globalisation for UK businesses?
A:
Foreign competition – Cheaper imports can undercut UK businesses.
Loss of UK staff – Skilled workers may move abroad.
Threat to service industries – Jobs outsourced to low-cost countries.
Diseconomies of scale – Larger businesses may struggle with coordination and efficiency.
Q: What is the “brain drain”?
A: When skilled workers leave the UK to work for overseas companies.
Q: What is an export?
A: A product made in the UK and sold to overseas markets.
Q: What is an import?
A: A product made abroad and brought into the UK.
Q: Why do businesses import goods?
A: To access unique products and cheaper materials.
Q: What is an exchange rate?
A: The price of one currency in exchange for another.
Q: What happens when the pound is strong?
A:
Imports become cheaper
Exports become more expensive
Q: What happens when the pound is weak?
A:
Imports become more expensive
Exports become cheaper
Q: How do exchange rates affect business profits?
A: A strong pound reduces profits for exporters but benefits importers. A weak pound does the opposite.
