Category: Business Studies

Benefits of business activity for people People would be benefiting in many different ways, but here I would just like to talk about the jobs which would be created for the people. If a business starts it surely has to employ people, something which is actually going to benefit the people a lot.

Benefits of business activity for customers Customers would be getting more a variety of things and other people who are potential customers would be getting the products which they want as they would have not been made available had the business not been operating.

Impact of business activity Every country in this world does everything possible to promote business activity as the benefits outweigh the demerits. Business activity is going to have an impact on all the stakeholders. The society would be benefitting by getting more jobs whereas the business owners would be earning profit.

Impacts on host countries Benefits Foreign currency Employment opportunities Local firms benefit from supplying services and components to the new factory Tax revenue to the government Management expertise improve cause of foreign supervisors Output of economy will increase, GDP will increase   Drawbacks Exploitation of local workforce Pollution Local competing firms squeezed out Reduction in…

Multinational businesses Businesses that have their headquarters in one country but operating branches, factories and assembly parts in others More than exporters/importers they produce g&S in more than one country. Advantages Nearness to markets: lower transport costs, better market information regarding consumer tastes. Lower costs of production: tax incentives, government grants, low labour rates, cheap…

Free trade and globalization: Trade barriers Tariffs : Taxes imposed on imported goods to make them expensive Quotas: Limits in quantity/value of certain goods Voluntary export limits: An exporting country agrees to limit the quantity of goods sold to prevent tariffs/quotas   The moves to reduce the number of trade restrictions have led to globalization:…

Nature and scope of international trading Benefits Wider choice of goods and services Creates competition Specialization, comparative advantage Political and social links Drawbacks Loss of output and jobs from domestic firms cannot compete effectively with imported goods Switch of making goods will cause job losses and factory closure Decline in domestic industries Loss of foreign…

Mixed economy Some private businesses, driven by profit. Some controlled by government Private: mobiles, cars, computers Essential services: police, fire service, defence, social services. Goods and services which can benefit both consumer and society(merit goods) Taxes to the government Government places limits on the nature of business activity: restricting monopoly, control pollution from factories. Advantages…

Planned economy State ownership and control Consumer preferences is unimportant State decides what to produce E.g. Cuba, North Korea State ownership, control over economic resources Advantages: Central planning prevents duplication and competition Production based on needs not consumer spending patterns Long term planning Disadvantages No consumer choice No competition to improve product design and keep…

Economic systems: Market economy Private ownership Resources allocated towards making what consumers like Firm operate to make profit If consumers want to buy a product then the price will rise Restricted government role, limited to defence, police, justice systems E.g. Taiwan,USA Private property, profit motive, price system Advantages: Profit makes firm more effective Competition keeps…