keywords theme 3

Question 1

absolute poverty

Answer 1

not having enough income to provide the basic necessities for survival

Question 2

aid

Answer 2

given by both governments and NGO’s to countries that are struggling to reduce poverty or deal with disasters

Question 3

balance of payments

Answer 3

the accounts that record all international transactions, including trade and capital movements

Question 4

BRIC

Answer 4

stands for Brazil, Russia, India, China and south Africa, five of the worlds largest growing economies

Question 5

commodities

Answer 5

raw materials or semi-manufactured products that are traded in bulk and are not recognisably originating from any particular business e.g. iron ore, cotton, wheat

Question 6

common markets

Answer 6

have completely free trade internally and a single unified trade policy covering all member countries’ trade with the rest of the world

Question 7

corporate culture

Answer 7

the set of important assumptions that are shared by people working in a particular business and influence the ways in which decisions are taken there

Question 8

CSR

Answer 8

means taking decisions that reflect all stakeholders’ interests

Acting ethically and in an environmentally positive way

Question 9

current account of the balance of payments

Answer 9

records all trade in goods and services

Question 10

developed countries

Answer 10

include most of Europe, Japan, the USA, Canada and Australia. All have high incomes. Through capital investment, they have acquired sophisticated production facilities

Question 11

developing countries

Answer 11

have relatively low standards of living, compared to developed countries. They may have small manufacturing sectors; many people may be engaged in agriculture

Question 12

diversifying

Answer 12

means selling more than one product, or the same product in more than one market, If one market shrinks, profits can still be made with other products or in other markets

Question 13

economic growth

Answer 13

refers to the rate of growth of output, real incomes and GDP

Question 14

emerging economies

Answer 14

characterised by rapid economic growth. They still have seen big increases in manufacturing output an standards of living are rising. Some would still be described as poor countries but others are well on the way to becoming developed countries.

Question 15

ethical decision making

Answer 15

means following codes of practice that ombody moral values. The objective is to do the right thing, acting with honesty and integrity

Question 16

ethnocentric model

Answer 16

an approach to marketing based on the tendency to look at tghe world primarily from th eperspective of ones own culture. A business may simply do the same everywhere as it does in its home market

Question 17

Eurozone

Answer 17

refers to the 20 EU members that use the euro as a singe currency

Question 18

free trade areas

Answer 18

are groups of countries that trade completely freely with each other, with no trade barriers, but each member country retains its own independent trade policies in relation to the rest of the world

Question 19

geocentric approach

Answer 19

sees the world as a potential market with both similarities and differences in domestic and foreign markets. An effort is made to develop integrated world market strategies to gain the best from both of these strands

Question 19

Gini coefficient

Answer 19

provides an objective measure of income inequality and can range from 0-1. A coefficient of 0 would mean income is shared equally between all individuals, whilst a coefficient of 1 would mean one person within the population has all the income and everyone else non

Question 20

global market niches

Answer 20

smaller, more specialised parts of a global market where customers in more than one country have particular needs that are not fully met by the global mass market

Question 21

glocalisation

Answer 21

combined the worlds “globalisation” and “localisation” to emphasise the idea that a global product or service is more likely to succeed if it is adapted to the specific requirements of local practices and cultural expectation

Question 22

human development index

Answer 22

constructed by the United Nations Programme and provides a measure of development based on access to health care and education as well as national income. It therefore includes qualitative as well as quantitative aspects of development

Question 23

incentives

Answer 23

are financial rewards than can influence decisions. Individuals may respond to an incentive to work. Businesses may respond to incentives to invest (lower interest rates)

Question 24

index numbers

Answer 24

can be created for any time series data so that comparisons can be made more easily

Question 25

IMF

Answer 25

international monetary fund, co-ordinates the international monetary system. It tries to keep the system stable, providing adequatein finance for world trade to continue uninterrupted.

Question 26

inequality

Answer 26

refers to big differences in incomes and wealth within society. China, and USA and Latin American countries have the most unequal distributions of income and wealth; the UK has greater inequality than most other European countries, but this may change.

Question 27

interdependence

Answer 27

refers to the way in which different economies have become increasingly reliant one one another through trade, capital movements and international agreements

Question 28

Lorenz curve

Answer 28

shows the extend of inequality in a particular economy. It plots the percentage of the population that receives each decile of total income

Question 29

migration

Answer 29

occurs when people move from one region to another or from one country to another, seeking employment

Question 29

market saturation

Answer 29

occurs when it becomes impossible to expand sales further in that particular market

Question 30

minimum wage

Answer 30

is the minimum rate of pay per hour that must by law be paid by employers

Question 31

nominal value

Answer 31

means value in money terms at current prices. No allowance is made for inflation

Question 32

non-governmental organisations

Answer 32

a term applied to not-for profit organisations that either act as pressure groups or as charities or both

Question 33

non-price competition

Answer 33

refers to any competitive activity that does not involve cutting prices

Question 34

offshoring

Answer 34

means locating production in a foreign country. The objective may be to exploit cost savings, most often lower wage rates. Or it may be close to a thriving market or to avoid trade barriers.

Question 35

polycentric model

Answer 35

an approach that considers each target market to be unique. Each of its subsidiary businesses develop unique business and marketing strategies that suit the relevant location

Question 36

poverty trap

Answer 36

a situation in which someone would be even poorer or not much richer if they had a job because they would no longer receive unemployment benefits from the government.

Question 37

protectionism

Answer 37

any government policy aimed at protecting the domestic economy from competing imports. Trade barriers can protect specific domestic industries and their employees by raising the prices of imported products. They will benefit but not the consumers whose purchasing power is reduced by high prices

Question 38

pressure groups

Answer 38

organisations that attempt to influence public policy and especially government legislation, regarding their particular concerns and priorities.

Question 39

professional bodies

Answer 39

represent groups of professionally qualified people in specific types of work. Examples include the BMA, law society and the institute of chartered accountants.

Question 40

purchasing power parity (PPP)

Answer 40

is a way of adjusting monetary values to allow for differences in prices between countries

Question 41

Quotas

Answer 41

physical limits on the level of specific imports in any one year

Question 42

rationalisation

Answer 42

means closing down parts of a firm that duplicate some functions. It may happen after a merger, e.g. when one bank merges with another, any one branch that is close to another in the same group will be kept open while any others are closed down.

Question 43

real value

Answer 43

can be calculated to show changes in values with the effects on inflation removed. In other words, all values are expressed at constant prices

Question 44

redundancies

Answer 44

job losses that result from fewer employees being needed, because of rationalisation, using more capital intensive production or falling demand for the product

Question 45

relative poverty

Answer 45

affects people who do not have enough income to participate in the normal life of the society in which they live

Question 46

risks

Answer 46

are threats that may not occur but can be quantified using probabilities.

Question 47

social and cultural differences

Answer 47

individual societies and groups may have a distinctive way of life, affecting their choice of product. This will also affect the way they do business with one another

Question 48

subcultures

Answer 48

are groups of people who have interest and values in common. They may be based on hobbies, life-styles, ethnic or religious background or just personal enthusiasms and preferences. Businesses may target subcultures as potentially profitable niche markets

Question 49

subsidies

Answer 49

sums of money paid by the government to a producer, so that the price to the customer will be lower than it otherwise would have been. Within the EU, most subsidies actually go to farmers, so that some food prices are lower than the cost of production.

Question 50

supply chains

Answer 50

sequences of processes that follow one another from start to finish of production

Question 51

tarrifs

Answer 51

taxes on imported goods. They make the price higher; sales will generally be lower

Question 52

technology and skills transfer

Answer 52

occurs when FDI brings new businesses into an economy and employees learn new skills that they take with them when they change jobs

Question 53

trade blocs

Answer 53

groups of countries where barriers to trade are reduced or eliminated between member states

Question 54

trade creation

Answer 54

occurs when there is an increase in the total amount of goods and services traded because of reduced trade restrictions within a trading bloc.

Question 55

trade diversion

Answer 55

occurs when a trading bloc reduces imports from non-member countries, enabling businesses within member countries to increase sales inside the trading bloc

Question 56

trade liberalisation

Answer 56

refers to the process of reducing barriers to trade so that economies can move gradually closer to free trade, which would ultimately mean that there are no trade barriers at all

Question 57

trade liberalisation

Answer 57

refers to the process of reducing barriers to trade so that economies can move gradually closer to free trade, which would ultimately mean that there are no trade barriers at all

Question 58

trade union

Answer 58

organisations that represent employees in negotiations with employers

Question 59

transfer pricing

Answer 59

occurs when one part of an MNC in one country transfers (sells) goods or services to another part in another country. The price charged in the "transfer price". This may be unrelated to costs incurred and can be at a level which reduces profit and hence the total tax paid

Question 60

Wealth

Answer 60

consists of accumulated assets, including bank deposits, shares, property and businesses

Question 61

working conditions

Answer 61

refer to possible events in workplaces that may affect the welfare of employees

Question 62

world banks

Answer 62

lends to developing countries in order to fund projects which will help them to raise incomes and make their economies more efficient

Question 63

WTO

Answer 63

world trade organisation, it supervises world trading arrangements and trade negotiations and helps to resolve disputes between governments and businesses.