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Define a multinational company
A company that operates in at least two different countries
What are economies of scale?
Fall in average prices with an increase in output
State two benefits of becoming a multinational company
Larger customer base, higher recognition
State two benefits of multinationals to a country/economy
Increase in income, increase in tax revenue
State two drawbacks of multinationals to a country/economy
Environmental damage, lack of accountability
What is international trade?
Trade of goods between different countries
What is visible trade?
Trade of physical goods
What is invisible trade?
Trade in services
What is balance of trade?
Difference between visible exports and visible imports
What is surplus?
Amount of something that is more than needed or used
What is exchange rate?
Value of one currency in terms of another currency
How does fall in exchange rates influence exports?
Demand for exports increases
How does fall in exchange rates influence imports?
Demand for imports decreases
How does rise in exchange rates influence exports?
Demand for exports decreases
How does rise in exchange rates influence imports?
Demand for imports increases
What are exports?
Goods and services sold overseas
