BUSINESS - JC2

Define protectionism.

• No restrictions or trade barriers exist that might prevent or limit trade between countries.

• Limits on the physical quantity of a certain product or service.

• Using barriers to free trade to protect a country's own domestic industries.

Why become a multinational company?

• Access to local natural resources

• Avoid import restrictions

• Closer to main markets

• Lower costs of production

• All of the above

(a)   is the increasing freedom of movement of goods, capital, and people around the world.

1. Employment

2. Local firms will be forced to improve their products and services quality

3. Management expertise in the community will slowly improve

4. Tax revenues to the government will increase

The followings are:

• Benefits of free trades to MNCs

• Benefits of imposing tariffs

• Benefits of MNCs to host countries

• Benefits of privatization

A book printing company merges with a famous book store in town.

• Horizontal integration

• Vertical integration

• Forward vertical integration

• Backward vertical integration

• Conglomerate integration

The ability to spread advertising and marketing budget over an increasing output.

• Marketing economies of scale

• Marketing research

• Economies of scale

• Marketing budgeting

• Substitute goods

• Luxury goods

• Complementary goods

• Food!

- Limited choice of products

- Less investment in new products

- Complacency of firms

- No incentive for the firm to lower costs and improve efficiency

The above are the drawbacks of ___________.

• Social audits

• Monopolies

• Oligopolies

• MNCs

_________________ assess the impact of a business's activities on the society - pollution levels, health and safety record, contribution to communities, etc.

• Environment audits

• Employment audits

• Social audits

• Cost-benefit audits

Pressure groups can be both at national and international levels.

• True

• False