business edexcel a level > 4.1 > Flashcards

4.1 Flashcards

(59 cards)

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1
Q

what is an emerging economy

A

an economy in the process of rapid growth and industrialisation

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2
Q

what are the features of an emerging economy

A

-rapid industrialisation
-potential to become developed
-faster long term economic growth than developed
-business struggle to access global markets
-many still in poverty

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3
Q

list the classic original emerging economies; BRICS countries

A

-brazil
-russia
-india
-china
-south africa

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4
Q

what are the BRICS

A

-group of emerging countries who seek to establish deeper ties between members and cooperate on economic expansion and trade

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5
Q

what is the uk growth rate

A

2.25%

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6
Q

what are the largest economies

A

usa
china
india

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7
Q

what are the implications of economic growth for businesses/ individuals

A

-more educated, middle class consumer
-increased consumer spending
-cultural shifts eg healthcare
-demand for infrastructure (transport)
-source of skilled low cost labour
-jobs created; income; demand; growth
-rising standard of living
-rising wages
-more travel
-niche markets emerge
-more people move to service sector

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8
Q

what are the risks of business in emerging economies

A

-political instability
-cultural differences
-variable approach to financial/ legal
-corruption
-emerging market becoming major exporter
-low cost production makes developed economies uncompetitive in some marke

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9
Q

what businesses often operate in emerging economies

A

-multinationals
-as global businesses, want to enter fast growing markets + be established in developed

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10
Q

what are the key indicators of growth

A

-GDP
-literacy
-health
-human development index HDI

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11
Q

what is international trade

A

the exchange of products between countries

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12
Q

what are imports

A

goods brought into one country from another

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13
Q

what are exports

A

goods produced by one country are sold to another country

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14
Q

what is business specialisation

A

when businesses only produce a limited product range eg coca cola

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15
Q

what is the benefit of specialisation

A

-efficiency in production
-economies of scale
-lead to lower unit costs

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16
Q

how do countries specialise

A

-specialise and export goods/ services the country is best at
-may provide competitive advantage for the country
-eg ivory coast + cocoa

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17
Q

what is foreign direct investment FDI

A

-investment from one country to another, normally by businesses rather than governments
-involves setting up operations in the country / acquiring stakes in other businesses

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18
Q

what is inward flow FDI

A

-FDI into domestic market

eg a foreign retail firm invests to open new stores in the uk

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19
Q

what is outward flow FDI

A

investment from domestic market to other markets

eg a uk business completes a takeover of a business in a different country

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20
Q

why may businesses partake in FDI

A

-take advantage of low labour costs
-operate closer to natural resources and supplies
-avoid protectionist measures eg tariffs
-support strategy of market development
-earn target return on investment by buying assets

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21
Q

pros of FDI for the country

A

-infrastructure accelerator
-better training for local workers
-grows a country’s export capacity
-technology + info transfer
-more competition
-creates new jobs; income

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22
Q

what is globalisation

A

process in which economies have become increasingly integrated and interdependent; it is dynamic

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23
Q

what are the characteristics of globalisation

A

-greater trade across borders
-increased FDI
-development of global brands
-more outsourcing / offshoring
-high labour migration
-shift in economic power between economies
-increased innovation and infrastructure

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24
Q

what is a multinational company MNC

Study These Flashcards
A

companies selling worldwide, operating on an international scale and becoming more connected

25
what factors contribute to globalisation
-trade liberalisation -containerisation -technological change -growth of MNCs and transnational companies -migration -FDI -increased significance of transnational companies -political change -global labour force -structural change
26
what is trade liberalisation
process of removing barriers to trade between nations, removing protectionist measures
27
what are the benefits of trade liberalisation
-more competitive market -creates opportunities for business -can lower prices for consumer and broaden range of products available
28
how has containerisation led to globalisation
-the cost of ocean shipping has decreased due to containerisation / bulk shipping -helps lower prices to become more competitive
29
how has technological change led to globalisation
-reduced cost of communication of information ; consumers can use websites to find info about global products -tv channels have provided global marketing
30
how has the growth of MNCS led to globalisation
-increased FDI -easy to grow business abroad
31
how has migration led to globalisation
-movement of culture; specialist shops -low cost labour -may send money back home, increasing expenditure at home country -fill skills gap
32
pros of globalisation
-enhances growth; higher income + reduced poverty -free movement of labour -sharing ideas/ skills / technology across borders -increased consumer awareness of climate change / income equality -competitive pressures avoid exploitation
33
cons of globalisation
-inequality of income / wealth -inflation -vulnerability to external shocks -threat to global commons eg ecosystems, deforestation, shortage of water etc -unemployment if production is moved -standardisation ; loss of diversity -dominant global brands reduce competition -countries may reduce tax/ health and safety etc to be attractive
34
what are the benefits of a global labour force
-longer life spans, work days -more employment; disposable income -people gain experience + start own business -lower costs as more available to work
35
what is structural change
long term shift in fundamental structure of an economy, often linked to growth or economic development eg move from primary to secondary sector
36
what is protectionism
attempt of a country to impose restrictions on trade in goods/ services to protect domestic businesses from overseas competition
37
what are the main forms of protectionism
-import quotas -tariffs -government legislation -domestic subsidies
38
what is an import quota
volume / value limit on the level of imports allowed into a country in a given time period
39
pros of quotas
-less foreign competition -prevent job losses -more income tax for gov
40
cons of quotas
limit consumer choice make products more expensive
41
what is a tariff
tax intended to protect sales of domestic products from competitive imported substitutes
42
pros of tariffs
-can compete with foreign alternatives -gov increase tax revenue; -protect jobs; -goes to public services so public benefit
43
cons of tariffs
-increase cost of goods for consumers -trade war via tariffs -loss of job in exporting industry
44
what is government legislation in protectionism
-most countries have consumer protection laws sometimes used to stop firms selling dangerous products
45
pros of government legislation
-reduce competition -job security
46
cons of government legislation
-may provoke retaliation
47
what are domestic subsidies
sum of money given by a government to producers of a particular product
48
pros of domestic subsidies
-improve balance of payment, reducing import, increasing export -lower prices -preserve jobs in competitive market
49
cons of domestic subsidies
-firms may become reliant on it -have to be financed eg by tax
50
what are trading blocs
-groups of countries in specific regions that manage and promote trade activities -lead to trade liberalisation between members
51
pros of trading blocs
-econ of scale (larger markets) -competition -greater trade -market efficiency -free trade -free movement of labour -stronger relationship with countries
52
cons of trade blocs
-more expensive outside of bloc -can only be member of one bloc -cant negotiate outside of bloc
53
what is the world trade orgsnisation
-deals with global trade -deals with disputes -encourages trade liberalisation
54
what is NAFTA
trade bloc between USA, CANADA, MEXICO worlds largest free trade zone, combined population of 490m
55
what is ASEAN
trade bloc between southeast asian nations 10 nations, 3trill economic size brunei, cambodia, indonesia, laos, malaysia, myanmar, philippines, singapore, thailand, vietnam
56
what is the EU
-custom union, single market, single currency trade bloc between European countries -free movement of goods, services, people -27 countries, not UK -four key freedoms
57
what are the four key freedoms of the EU
-free trade of goods -mobility of Labour -free movement of capital -free trade in services
58
how may businesses benefit from trade blocs
-access to emerging markets -access to cheap raw materials -removal of barriers
59
how may businesses suffer from growth via trade bloc
-competition -lose diveristy
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