4010328
| Question | Answer |
| Exports | Goods and Services sold to another country e.g. Innocent Smoothies |
| Imports | Goods and services bought from another country e.g. bananas from Spain |
| Balance of Payments | A record of the value of a country's exports, imports and financial transactions with the rest of the world for a year |
| Globalisation | The process of increasing international trade and economic interdependence between countries |
| Advantages of trade to the UK economy | -Income - Growth - Choice and product differentiation - Prices - Competition and innovation - Raw materials (explain why for each one) |
| Disadvantages of trade to the UK economy | - Competition - Economic dependency - Unstable commodity prices - Power of MNCs (explain why for each one) |
| Exchange rates | The rate at which one currency is exchanged for another |
| Effects of exchange rates on imports/exports | Strong Pound Imports Cheap Exports Expensive (strong pound - buys more dollars for e.g.) |
| How do exchange rates affect the individual customer | - Foreign holidays - Withdrawing cash from cash machines abroad - Food in supermarkets - Imported consumer good - Direct imports of big ticket items like cars and furniture |
| Factors that affect the sales of imports and exports | - Style and image (e.g. ipod touch) - Quality (e.g. Dyson Hoover) - Reliability |
| Boycott | When consumers stop buying a product as a protest or to force the company to stop doing a particular action |
| Consumer empowerment | Consumers demonstrating their needs, wants and demands through their purchasing decisions in the marketplace |
| How do individual's influence the products business' supply | - Buying fair-trade products Buying ethical/environmentally friendly products - Buying locally sourced products |
| Advantages of firms operating overseas | - Lower operating and labour costs - Increased competitiveness - Firms are nearer to markets and materials reducing transport costs - Overcome exchange rate fluctuations if locate in Europe and use the Euro |
| Disadvantages of operating overseas | - Jobs are lost in the UK - Unfamiliar culture and language - Transport costs to home markets - Exchange rate changes may increase costs and reduce profits |
| Foreign Direct Investment | When a business from one country builds a factory in the UK |
| Why do foreign firms locate in the UK? | - Highly skilled labour force - Tariff-free access to the European market - To buy existing UK owned brands and distribution networks - English is the accepted language of business, science and technology |
| Consequences of foreign firms closing a plant/factory | - Jobs are lost - Suppliers may have to close who supplied the factory |
| Open economy | A country that trades with other countries e.g. UK |
| Mobility of labour | The ability of labour to change jobs |
| Benefits of globalisation for the UK labour market | - Jobs are created in sectors where the UK does well e.g. finance - New migrant labour arriving into the UK lowers labour costs - Opportunities to increase sales in new export markets |
| Drawbacks of globalisation for the UK labour market | - Low skilled jobs are lost (particularly manufacturing in UK) - Increasing immigration depresses wages - Relocating production overseas can cause unemployment |
| Immigration | Migration into a country |
| Emigration | Leaving one's native country or region to settle in another |
| Immigration affects the UK positively by... | - New knowledge and skills - Reducing wage inflation and increasing competitiveness - Providing more workers to support UK's ageing population - Increasing the number of consumers as well as producers |
| Immigration can lead to... | - Loss of valuable skills/human capital -Reducing unemployment in recessions |
| Emigration can affect the UK labour market by... | - Language and cultural barriers - Visas, work permits etc. are needed outside the EU - Restrictions by foreign governments |
| Government actions to regulate migration | - A points system - The SAWS |
| Government's points system | Potential immigrants score points according to how well their skills match those needed by the UK |
| The SAWS | Seasonal Agricultural workers scheme - Allows farmers to bring foreign nationals to the UK to do seasonal work |
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