Y9 Business Studies - C22 Business in International Community

What is an exchange rate?

• The price of goods in a local market

• The value of one currency compared to another

• The interest rate set by banks

• The cost of living in a country

What happens when a currency appreciates?

• We can buy more of another country's currency

• Export prices fall

• Local goods are more expensive to export

• Import prices rise

Which of the following is a fixed exchange rate?

• Determined by the central bank

• Set by the market forces

• Changes freely

• Varies with inflation

What is globalisation?

• The increase of local businesses

• The process of countries becoming isolated

• The decline of international trade

• The process by which countries are connected through trade

Which organisation is NOT an international economic organisation?

• World Trade Organisation (WTO)

• European Union (EU)

• North American Free Trade Agreement (NAFTA)

• United Nations (UN)

What is one advantage of joining the EU?

• Limited access to other markets

• Higher tariffs on imports

• Reduced job opportunities

• Increased competition resulting in better products

What is a consequence of globalisation?

• Fewer choices for consumers

• Less international trade

• Higher prices for goods

• More efficient businesses

What is a multinational company?

• A company that only imports goods

• A company that only exports goods

• A company that has operations in multiple countries

• A company that operates in one country

Why do firms become multinationals?

• To increase local competition

• To cut costs and expand markets

• To reduce the quality of products

• To limit their operations

What is one disadvantage of multinational companies operating in a country?

• They reduce competition

• They increase local production

• They create skilled jobs

• They can influence government policies