1 Flashcards
BRIC economies
Brazil
Russia
India
China
South Africa
Super powers
Countries with global influence and power
MINT
Mexico, Indonesia, Nigeria, and Turkey
economy
is a state of a country in terms of the production and consumption of goods and services and supply of money
Indicators of Economic growth
GDP - sum of the value of everything they produce as a nation
Literally rates - are a key indicator educational success
Health - life expectancy
HDI - human development index - combines life expectancy ,education, per capita incomes. Is used to rank countries
Specialisation
becoming an expert at one skill
Benefits of specialisation
Increased productivity
more resources devoted to one thing instead of being spread out across many different things helps EOS
competitive advantage
increased productivity will lead to GDP growth and boost economy
Negative impacts of specialisation
a country may become over reliant on one industry and does not spread risk
other countries may be cheaper
if it grows to big may suffer from DEOS through lack of communication
FDI benefits
Jobs , skilled workforce
Trade liberalisation
process 0f making international trade easier through relaxation of tariffs and barriers
GATT
new jobs for unskilled workers (low labour costs)
The General Agreement on Tariffs and Trade is a legal agreement between many countries, whose overall purpose was to promote international trade by reducing or eliminating trade barriers such as tariffs or quotas
benefits of trade liberalisation
helps lower prices as there is less tax to pay
broadens the range of quality goods and services available because they are now able to buy imported goods
More competition means lower prices and increased quality
investment in the area
access to foreign markets
Drawbacks of trade liberalisation
Some business may not be able to keep up w competition and may be forced out of the market
how has politics increased globalisation of markets
politics now happens on a global scale meaning there are less protectionist policies
and more open trade between nations
Factors influencing globalisation
Transport - cheaper, EOS businesses can ship more quantity.
Communication - messages can be sent from anywhere in the wold
Increased MNCs -
Globalisation caused by FDI
companies investing or setting up production in other countries to avoid trading blocs
Can give countries income generation , jobs , GDP growth , skills …
protectionism
Protecting a country’s domestic industries from foreign competition by taxing imports, imposing quotas or passing laws
Tariffs
A tax placed on an import to increase its price and decrease its demand
increases the price of the product as costs are higher meaning there is a fall in demand
consumers will the switch to domestic goods
gives domestic producers price advantage
can raise money for government to spend on infrastructure
negatives of placing tariffs
can lead to job loss as having to pay tariffs can lead to reduction In production
some products do not put off customers willing to pay for unique imported product even if tariffs have raised the price
Reasons for Tariffs
poorer countries may impose heavy tariffs on imports to raise much needed funds for health care and education
Tariffs are sometimes only used on products that have negative impacts like Cigarettes
Protectionism
Quota
Physical limit on quantity of goods imported or exported
imposing a limit will increase share of the market available for domestic products
Uses of quotas
Import quotas are imposed to
protect jobs of domestic producers
Import Quotas are also imposed as
a bargaining chip to be used in
negotiations on trade
Advantages of quotas
1 protects domestic industries
e.g. USA calling for quotas on
steel imports
2 safeguards jobs in domestic
industries
3 Benefit to the customers, the
price of imported goods rise so
domestic goods appear cheaper
and better value in comparison
Disadvantages of Quotas
Quotas are also complex for the country using them. They require a lot of paperwork indicating exact amounts of products for each country facing a quota
When one country uses quotas, its trading partners do the same and
the end result is less exporting opportunity for all producers and higher
prices for all consumers.
