theme 4 buisness Flashcards
(55 cards)
list countries BRICS
Brazil russia india china and south africa
list countries MINT
mexico indonesia nigeria and turkey
explain why employment patterns are one of most healthy indicators of healthy economy
- growing economies start to see change in employment patterns
- shows country can diversify from traditional products.
- leading to structural change from primary sector to secondary sector
why have many asian economies experienced high levels of growth?
- through their regional trading bloc : ASEAN
- through dominance of global manufacturing
- has efficient cluster of suppliar’s and excellent infrastructure = cost effective growth
- has acess to low cost labour
- consumers are spending more which increases demand and reinforces local production and distribution
explain why business might prefer PPP to GDP as a measure of growth
- GDP figures indicate value of economic activity, however use exchange rates which are always rapidly changing.
- therefore must use a variety of exchange rates over period of time for valuable results
- must take care as they are a value of GDP statics
- GDP may oversee what people can actually buy in those countries.
- PPP is better for statistical reasons
- and gives investor better idea of what buyers in different countries can afford.
what are the key factors that affect external investment?
literary rate
health
why do some countries limit imports?
- place trade barriers in way eg. tarrifs
- benefits and allows domestic producers chance to grow.
- this benefits their market share growth.
- also form of protectionism against foreign investors.
- giving infant businesses chance to grow
what are risks involved in exporting and importing?
- if exchange rates move the wrong way between currency of exporter and that of the importer will have serious financial consequences.
- conflict with distributors are hard to resolve outside the country.
leading to disruption in distribution chain
how does specialisation lead to greater efficiency?
increases speed and skill at which task can be done
what is meant by comparative advantage?
theory that a country should specialise in products and services that it can produce more efficiently than other countries.
explain FDI and the 2 types
- Foreign direct investment is:
- investing by setting up operations or buying assets in another country
- horizontal FDI - producing same product in different country
- vertical FDI - seeking material for own service.
what are 3 features of globalisation?
- goods and services traded throughout the world.
- many people able to live and work in a country of choice (multi-cultural society)
- capital flows freely between countries.
what is the free trade agreement (FTA) give an example
Eg. NAFTA
- all members remove all protectionism barriers between them
- but have different barriers for non-members
what is a preferential trading area (PTA) give an example
eg. ASEAN
- allow certain products in PTA to have reduced tariff rates
whats a customs union and give an example
eg. CARICOM
- where all members remove all barriers between them
- and have same barriers for non-members
whats a common market and give an example
eg. ASEAN
- goods/labour/capital move freely between membered states
- barriers and tariffs also removes or deducted.
what is a single market and give an example
eg. EU
- almost all trade barriers between members have been removed.
- have common laws to easily transport goods
give 4 impacts of trading blocs
- opportunities
- provide counterbalance against globalisation (protecting from competitors)
- resources easier to source and labour easier to recruit
- may allow members to specialise in line with countries comparative advantage
what are 4 indicators of growth
- GDP
- Health
- Literacy
- HDI
what is trade liberation
process by which international trade is made easier through a relaxation of rules which governs it
what is globalisation
the growing integration of the worlds economies
how had political change lead to globalisation?
-politics happens on global scale, involving all governments worldwide
what is TNC - transnational company?
TNC is a multinational company that works across national boundaries
how have TNC’s led to globalisation?
- lowering barriers of trade across national borders.
- TNC’s use cheap labour in LEDCs to mass produce goods for global markets.
- spread globalisation through heavy global advertising.
