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Globalisation Edexcel A-Level Business > Globalisation 4.1 > Flashcards

Globalisation 4.1 Flashcards

1
Q

What is globalisation?

A

The increasing integration of economies around the world.

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2
Q

What are some factors that have contributed to globalisation?

A

-Technological change
-Decreased cost of international shipping
-Migration (movement of people)
-Improved infrastructure and transport

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3
Q

How does technological change contribute to globalisation?

A

Reduced the cost and time of transmitting communication and information allowing integration of economies.

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4
Q

How does increased migration of people contribute to globalisation?

A

Individuals who are well educated can use their skills to fill jobs that are not filled in other countries.

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5
Q

What are the key characteristics of globalisation?

A

-Greater trade across countries
-An increased transfer of capital
-Development of global brands
-Greater use of offshoring and outsourcing

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6
Q

What are some strengths of globalisation?

A

-Gains from sharing knowledge across countries
-Enhanced growth has led to higher capita per incomes, reducing poverty
-Pressure from globalisation may lead to increased governance

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7
Q

What are some drawbacks of globalisation?

A

-Increased inequalities in income
-Inflation due to increased demand
-Vulnerability to external shocks as economies are deeply connected

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8
Q

What is protectionism?

A

Giving preference to domestic industries by making it harder for overseas competitors to export to your country

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9
Q

How do countries protect their domestic industries?

A

-Tariffs
-Import quotas
-Domestic subsidies

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10
Q

What is a tariff?

A

An added fee onto imports into a country

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11
Q

What are some arguments for Tariffs?

A

-Help inefficient industries survive, benefiting the workers and suppliers
-Public can benefit as the government collect more revenue which may be used to fund public services

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12
Q

What are import quotas?

A

An annual limit on the quantity of goods that can come into the country

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13
Q

What are the drawbacks of quotas?

A

-They reduce consumer choice and make products more expensive due to limited supply.

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14
Q

What are government subsidies?

A

A sum of money given by the government to the producers of a particular product.

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15
Q

How would a subsidy benefit an exporter?

A

They have increased profit for each unit sold and allows them to charge a lower price without any loss of profit margin.

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16
Q

What are the draw backs of government subsidies?

A

May lead to an increased taxation for the public and businesses operating.

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17
Q

What is a trading bloc?

A

An agreement between countries to have reduced regional trade barriers

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18
Q

What are two benefits to business within a country in a trading bloc?

A

-Firms can increase production and decrease costs through economies of scale
-More opportunities to sell in growing markets

19
Q

What are three examples of trading blocs?

A

-EU
-NAFTA
-ASEAN

20
Q

what is trade liberalisation?

A

The removal or reduction of barriers on the free exchange of goods between nations.

21
Q

What are some problems with trading blocs?

A

-Businesses may face increased competition from other firms inside the bloc
-trade between blocs may reduce as firms may only focus selling within the bloc

22
Q

What is foreign direct investment?

A

A company sets up a new business abroad or a company merges with another business overseas.

23
Q

Why may a firm choose to use FDI?

A

If their domestic market has become saturated, growth is much harder so they may choose to sell overseas to an unsaturated market.

24
Q

What are some problems with exporting overseas?

A

-Increased transport costs
-Potential protectionism barriers
-Limited control of how your product is marketed overseas

25
Q

What are some benefits of FDI to an economy?

A

-Capitial investments create higher output and jobs
-Country can benefit from the increased knowledge of a foreign company

26
Q

What are some problems with FDI to an economy?

A

-Gives foreign multinationals controlling rights within a country
-Multinationals take high profits and pay little tax

27
Q

What is Greenfield FDI?

A

A company will build its own business overseas from scratch

28
Q

What is brownfield FDI?

A

A business purchases or leases an existing business

29
Q

What are two benefits of Greenfield FDI?

A

-Has greater control of the business
-New facilities are going to be more efficient

30
Q

What are two drawbacks of Greenfield FDI?

A

-Entry process may take years
-Competition will be difficult to overcome

31
Q

What are two benefits of Brownfield FDI?

A

-Start-up costs are reduced
-Instantly requires a businesses staff and expertise

32
Q

What are three ways to enter a foreign market?

A

-Exporting
-Franchising
-Joint venture/merger

33
Q

What are the four indicators of growth?

A

-GDP
-HDI
-Literacy
-Health

34
Q

What are two positive impacts of economic growth on a business?

A

-Increased spending by consumers leading to increased sales
-Increased opportunities to expand

35
Q

What are two negative impacts of economic growth on a business?

A

-Increased competition due to increased imports
-Shortage of labour leading to increased wages

36
Q

What are the BRIC economies?

A

Brazil
Russia
India
China

37
Q

What are the MINT countries?

A

Mexico
Indonesia
Nigeria
Turkey

38
Q

What is economic growth?

A

When a country produces more goods and services than it did one year ago

39
Q

What is GDP?

A

Gross domestic product
The value of all goods and services produced in a country in a year

40
Q

What is HDI?

A

Human development index
combines income per capita, life expectancy and educational standards

41
Q

What do BRIC economies have in common?

A

-Large population
-Increasing global importance
-Rapidly growing economies
-Emerging economies

42
Q

What is an emerging economy?

A

An economy that can’t yet be classified as developed

43
Q

Why would a business want to move into an emerging economy?

A

-rapid growth of consumers disposable income
-Higher economic growth compared to developed markets

44
Q

Why are emerging economies sometimes risky?

A

-Political instability
-Increased competition as there are established domestic businesses and overseas businesses entering the market

Globalisation Edexcel A-Level Business (4 decks)

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