Topic 31 - Topic 32

Question 1

What is economic growth?

Answer 1

Economic growth is defined as the change in the total value of goods and services produced in a country from one year to the next.

Question 2

What is GDP?

Answer 2

The total value of all goods and services produced in a country in any one year is known as the Gross Domestic Product (GDP).

Question 3

What is GNP?

Answer 3

Gross National Product represents the total value of all goods and services produced by Irish companies or individuals both in Ireland and abroad. The activities of foreign-owned companies operating in Ireland are not included in GNP.

Question 4

List the benefits of economic growth

Answer 4

• New business start-ups will reduce unemployment
• Incomes rise, so people enjoy a higher standard of living.
• The government has more money to spend on health and education.
• Young people will not have to emigrate to find work.

Question 5

What is inflation?

Answer 5

Inflation is defined as a rise in the cost of living from one period to another.

Question 6

What is an economic boom?

Answer 6

An economic boom describes a period of substantial economic growth in an economy over a period of time.
• Wage levels rise
• Production increases.
• Prices increase, leading to a rise in inflation.

Question 7

What is a recession?

Answer 7

A recession describes a period where economic activity drops considerably over a number of months.
• There is a slowdown in production.
• Employment levels fall.
• Demand falls.
• There is low inflation, as prices remain the same, or fall.

Question 8

What is a depression?

Answer 8

A depression describes a recession that lasts for a considerable time and results in a long-term reduction in the level of production of goods and services in a country.
• Increasing unemployment
• Fall in demand for goods and services.
• Reduced consumer spending as consumers choose to save more.
• Inflation remains low.

Question 9

What are the positives of economic growth?

Answer 9

• Economic growth leads to increased employment, as firms need to hire more staff.
• Government income increases due to increased employment and reduced social protection payments.
• Foreign direct investment, from companies like Google and Apple takes place.
• Fewer Irish families like in poverty.

Question 10

What are the negative impacts of economic growth?

Answer 10

• Economic growth can widen the gap between rich and poor.
• Increased emphasis on work may result in less family and social time, which can. Affect wellbeing.
• Output and employment in agriculture can fall dramatically, as a result, many small farms close while others struggle to survive.

Question 11

List the impacts of economic growth on the environment?

Answer 11

• Increased finance for the government to promote sustainability and meeting climate change commitments.
• More money available to spend on pollution control by private businesses.
• Households have more income to spend on insulating their homes and energy efficient cars.

Question 12

What are TNCs?

Answer 12

Transnational Companies (TNCs) are companies that have operations in several countries in addition to their home country.

Question 13

What is international trade?

Answer 13

International Trade is the sale of goods and services between different countries.

Question 14

What is importing?

Answer 14

Importing is when goods or services are brought from one country into another.

Question 15

What is exporting?

Answer 15

Exporting is when goods or services are sent from one country to another.

Question 16

What is visible trade?

Answer 16

Visible trade id referred to as the import and export of physical (visible) goods.

Question 17

What is invisible trade?

Answer 17

Invisible trade is the import and export of services.

Question 18

List reasons for importing

Answer 18

• Ireland does not have some natural resources such as oil and steel.
• Ireland’s climate is not suitable for growing certain products, like coffee, oranges and bananas
• Irish people see advertisements on social media and online for goods and services all over the world, which increases demand for these goods among Irish consumers.
• Irish consumers may want products that are manufactured abroad such as Swiss chocolate or French cheese.

Question 19

List reasons for exporting

Answer 19

• Consumers in other countries want to buy Irish products like butter, milk and meat, as the quality is excellent.
• Ireland exports food products to other countries that are unable to produce these items, due to land or climate being unsuitable.
• Irish companies export to other countries in other to boost their sales and profits.

Question 20

List the benefits of international trade?

Answer 20

• Irish companied have access to a much larger market in European than just the home market.
• The Irish government benefits from increased tax revenue.
• Irish consumers have a broader range of products and services.
• Irish consumers will benefit from lower prices, as different producers compete for business.

Question 21

List the barriers to trade?

Answer 21

• Tariffs
• Quotas
• Embargos
• Subsidies

Question 22

What is a tariff?

Answer 22

A tariff is a tax placed on the import of certain goods into a country or trading area. Tariffs have the effect of making imported goods more expensive than home-produced goods.

Question 23

What is a quota?

Answer 23

A quota is a limit placed on the quantity of certain goods that can be imported into a country or trading area.

Question 24

What is an embargo?

Answer 24

An embargo is a total ban on certain goods into a country or trading area. This may be due to safety of environmental concerns.

Question 25

What is a subsidy?

Answer 25

A subsidy is where an individual country or a trading area (e.g. the EU) gives financial support to a particular firm or industry in order to help it compete. For example, Bus Eireann, Dublin Bus and Irish Rail all get a subsidy from the Irish government, as transport is necessary for the Irish economy to run.

Question 26

Calculate the balance of trade

Answer 26

Balance of Trade = Visible Exports – Visible Imports

Question 27

Calculate the balance of payments

Answer 27

Balance of Payments = Total export – Total Imports

Question 28

What is the global marketing mix?

Answer 28

When selling on foreign markets, it may be possible to use the marketing mic (the 4 P’s). However, because of difference in language, laws and customs, it is more common for a global business to use an adapted marketing mix, depending on the type of product or service they are selling.
Global Marketing Mix:
•	Product
•	Place
•	Price 
•	Promotion