imports: goods and services bought by people and businesses in one country from another country
imports results in money leaving the country which generates extra revenue for foreign businesses
exports: goods and services sold by domestic businesses to people or businesses in other countries
exports generate extra revenue for businesses selling their goods abroad
specialisation: occurs when a country/business decides to focus on producing a particular good/service
what are three benefits of specialisation?
lower unit costs due to economies of scale
businesses are able to charge a lower price for their products which increases the demand, or they may choose to stick to their original price and increase profit margins instead
gain a competitive advantage as value is added to product
foreign direct investment: investment by foreign firms which results in more than 10% share of ownership of domestic firms
what are three benefits of FDI?
increased economic growth as an inflow of money into the country
increased job opportunities as businesses expand operations
access to knowledge and expertise from foreign investors
inward or outward FDI?
when a foreign business invests in the local economy
inward
inward or outward FDI?
when a domestic business expands its operations to a foreign country
