IGCSE Business Studies - Business and International Economy
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Course
Business Studies,
Institution
Fourth Year / 10th Grade
This document gives you an in-depth understanding about globalisation, tariff and quota. As well as the benefits and limitations of a multinational company.
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Unit 4
TOPIC(S): Business and International Economy
PAGE(S):
1.1 Globalisation
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1. Reasons
More efficient communication and KEYWORDS
international transportation methods Globalisation: by which countries
have been developed to break down are connected with each other
geographical and language barriers. because of the trade of goods
Governments have changed their and services.
economic policies to allow foreign Tariff: a tax applied to the value of
companies to set up operations in their imported and exported goods.
countries for the benefit of international
Quota: a physical limit on the
trade.
quantity of goods that can be
Governments have also reduced trade imported or exported.
barriers, making it easier for goods and
services to move from one country to
another.
2. Characteristics Why do governments introduce tariffs and
import quotas?
Global recognition of brands
Small businesses cannot compete with
Growth in international trade
multinational ones and may have to
Dependency on the global economy close down.
Companies operating in more than one Unemployment may rise
country
The local economy gets damaged
Greater movement of products and
Less choice for consumers
services
Governments try to control the amount
3. Opportunities
of international trade.
Businesses can access more markets,
Tariffs and Quotas.
which may lead to an increase in sales.
Offers consumers a wider choice of
Due to increased competition,
products and services.
businesses operate more efficiently and
reduce costs due to cost-effective Multinational businesses supply
innovations and economies of scale. products and services cheaper than
local ones.
A reduction in costs will lead to
greater profits. They can also offer
Unit 4 1
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