16 - globalisation

Question 1

globalisation

Answer 1

worldwide growth of multinational companies, international integration, the spread of free markets and policies of liberalisation and free trade

Question 2

semi - manufactures

Answer 2

products beyond the raw material stage that are used in the production of finished products, e.g chemicals and metals

Question 3

absolute advantage

Answer 3

where a country using a given recourse input is able to produce more than other countries with the same input

Question 4

comparative

Answer 4

where a country can produce a good with lower input cost than other countries

Question 5

ricardian theory

Answer 5

outline the theory of comparative advantage created by David Ricardo

Question 6

strategic value

Answer 6

of extreme importance to a country - may be required in circumstances like wars

Question 7

trade embargoes

Answer 7

prohibition of the export and import of certain types of products

Question 8

marshall - lerner condition

Answer 8

depreciation or devaluation of a currency will lead to an overall improvement in the current account as long as the combined price elasticities of demand of exports and imports exceed one

Question 9

specific tax

Answer 9

a tax levied at a fixed rate per unit

Question 10

ad-volorem

Answer 10

a tax which is a percentage of the price of the unit