Lesson 4 Flashcards Preview

EQ1 Globalisation AS Level > Lesson 4 > Flashcards

Flashcards in Lesson 4 Deck (14)
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1
Q

Why is FDI attractive to investors? (6)

A

Wage rates - cheaper employment opportunities
Labour skills - better work force
Size of economy & population - wealthier market/produce useful
Political stability - little risk of war
Raw materials - Easy to access, cheaper
Physical location - climate, landlocked, accessible

2
Q

What is an EPZ

A

A small industrial area often on the coast where favourable conditions are created to attract foreign TNCs.

3
Q

What are favourable conditions? (2)

A

low tax

exemptions from tariffs & export duties

4
Q

What does technopoles mean?

A

Technologically innovative businesses and research industries

5
Q

What is the multiplier effect?

A

Other firms may gain business supplying parts, the increase spending power of the workers stimulates the service sector and higher tax revenues may be invested in education and infrastructure

6
Q

What is business clustering?

A

A industry occurs in one place.

7
Q

How does China have political stability?

A

Communist party been in power since 1949

8
Q

How does the market have potential?

A

it is emerging as people are becoming weather

9
Q

How does china have a positive image?

A

used 2008 olympics to rebrand itself as wealthy and optimistic

10
Q

How is the currency stable?

A

Exchange rates are stuck to US $ - less risk of losses

11
Q

How is china attractive to TNCs?

A

Good infrastructure and government banking

12
Q

What os SEZ?

A

Special economic zones where businesses can import raw materials & export them by paying reduced tariffs

13
Q

Why is cheap labour good?

A

Reduces costs & maximises profits - long term spending on heath care provides a healthy work force

14
Q

Cheap freight?

A

Shipping fees were low in early 2000s however there is now a shortage and large volumes get priority, low prices allow TNCs to outsource manufacturing to far places