Unit 3 Flashcards
(34 cards)
Define the term global trade. (1)
- buying and selling of goods/services between different countries (1)
Identify 2 significant UK imports. (2)
machinery (1)
vehicles (1)
precious metals (1)
oil (1)
pharmaceuticals/vaccines/PPE (1)
aircraft (1)
medical equipment (1)
plastics (1)
furniture (1)
Identify a significant Scottish import and a significant Scottish export. (2)
- Imports - pasta/bananas (1), oil (1), cars/phones/toys (1)
- Export - oil (1), whisky (1), tourism (1), financial services (1), salmon/shortbread (1), tartan/tweed (1).
Explain why the EU is the UK’s main trading partner. (2)
- Geographically close (ID) therefore transport costs are relatively low (EXP) (1)
- EU is culturally like UK (ID) so produces the type of goods that UK consumers want (EXP) (1)
Describe possible disadvantages of global trade to UK exporters. (2)
- increased competition/cheaper prices/better quality offered by foreign competitors (1)
- increase in transportation costs (1)
Describe advantages of international trade for UK households. (3)
- greater choice/variety of goods and services for consumers (1)
- consumers can buy products that cannot be produced in the UK (1)
- lower prices for consumers (1) so UK households could buy more/other goods (DEV) (1)
Explain the benefits of international trade for:
i) Individuals
ii) Firms
iii) Government
(4)
i) Individuals
- not all countries produce the same goods (ID) so greater choice/variety (EXP) (1)
- some countries can produce goods more cheaply than others (ID) which may lower prices (EXP) (1)
ii) Firms
- increases world competition (ID) which could lead to raw material prices falling (EXP) (1)
iii) Government
- job creation in export firms (ID) which leads to increase revenue/corporation tax/income tax (EXP) (1)
Describe 2 benefits of international trade. (2)
- greater choice/variety of goods/services (1)
- lower prices available (1)
Describe reasons for imposing barriers to trade. (3)
- to protect young/new industries (infant industries) (1)
- to protect employment (1)
- to prevent harmful products entering a country (ID) so that domestic consumers are protected (EXP) (1)
Define what is meant by the term tariff (1)
- a tax placed/levied on imports (1)
Other than a tariff, describe 2 barriers to trade. (2)
- embargo: a complete ban on certain goods (or goods from a particular country) being imported (1
- subsidy: a payment by the government to domestic firms (1)
Describe what is meant by a multinational company. (1)
- a firm that has its HQ in one country and has production facilities in at least one other country (1)
Give an example of a multinational company. (1)
- Coca cola (1)
- Amazon (1)
- Tesla (1)
- Ikea (1)
Describe the reasons for a firm becoming a multinational. (3)
- to gain an entirely new market in which to sell its goods or services (1)
- to increase the potential for growth (1)
- to avoid trade barriers put up by other countries (1)
- to reduce production costs (1) by accessing cheap labour/land(DEV) (1)
Outline 3 reasons why multinationals may decide to locate in developing countries. (3)
- Access to inexpensive land (1)
- Access to inexpensive labour (1)
- Access to a new market (1)
Explain 2 reasons for European multinationals deciding to locate in the UK. (2)
- the UK may have appropriate skilled staff (ID) which results in lower training costs (EXP) (1)
- educated workforce (ID) which may result in quality products being made (EXP) (1)
Describe 3 factors that UK businesses might consider before locating abroad. (3)
- the availability and affordability of trained workers
- cost of locating abroad
- infrastructure
A multinational has recently located to the UK. Describe two advantages and two disadvantages to the UK economy of this decision. (4)
- Advantages:
Increases job opportunities (1).
Reduces JSA payments (1).
Increases tax revenue (1).
Brings managerial skills (1).
Increases output/creates economic growth (1).
Boosts local economy (1).
May bring innovations that can boost other firms (1).
- Disadvantages:
Negative impact on competing firms (1).
May only provide ‘screwdriver jobs’ (1).
External costs – traffic congestion/pollution (1).
Repatriation of profits to home country (1).
Cost of government incentives (1).
Senior positions may be brought from home country/senior positions may be kept in home country (1).
Define the term exchange rate. (1)
the price of one currency in terms of another (1)
Explain a way in which a fall in the value of the sterling against the Euro may affect a UK holidaymaker going to a Eurozone country. (2)
the UK holidaymaker gets fewer € for their £ (ID) so their costs would increase/spending power has gone down (EXP) (1)
therefore UK holidaymakers cannot afford to buy as many excursions/meals out/souvenirs/may have to downgrade their hotel/book a shorter holiday/may choose to go on holiday elsewhere (where the exchange rate is better) (DEV) (1)
Before the lockdown in March 2020, the exchange rate of sterling to the Euro was £1 = €1.20 and in April, just after the lockdown was announced, it had fallen to £1 = €1.10. If you exchanged £1,000 for Euros, calculate how many fewer Euros you would have received in April compared to March 2020. (2)
£1,000 x €1.20 = €1,200
£1,000 x €1.10 = €1,100 (1)
Difference = €100 fewer (1)
The exchange rate was £1:$2 and now is £1:$1. State whether a UK holidaymaker going to the USA today is better or worse off. (1)
- worse off (1)
In recent years, the exchange rate of sterling to US dollars has fallen from £1 = $1·70 to £1 = $1·20. A person from the UK going to visit the USA has £1,000 to spend. Calculate the difference in the quantity of US dollars that a UK traveller would receive. (2)
£1,000 x $1·70 = $1,700 } (1) for both
£1,000 x $1·20 = $1,200
$1,700 - $1,200 = $500 (1)
