2.1 Government and the Economy: Unit 28 - 30 Flashcards
- What is Balance of payments?
- record of all transactions relating to international trade.
- What are the 2 parts of BOP?
- current account
- capital and financial account
- What is a current account? Capital and Financial account?
Current account- part of the balance of payments where all exports and imports are recorded.
Capital and Financial accounts are part of the balance where a flow of savings, investments, and currencies are recorded.
- What are exports? imports?
exports: goods and services sold overseas
imports: goods and services bought from overseas.
- What is the current balance? how to calculate.
difference between total exports and total imports
- total exports - total imports
- visible trade+ invisible trade
- What is current account deficit?
when the value of imports exceeds the value of exports.
- What is current account surplus?
when the value exports exceed the value of imports.
- What is a balance of trade/ visible balance? Invisible trade?
- visible balance:- the difference between visible exports and visible imports.
- Invisible trade:- involves the exchange of services.
- What is visible trade? Invisible trade?
i. trade in physical goods.
ii. involves in exchange in services.
- What is primary income?
money received from the loan of production factors abroad.
- What is secondary income?
government transfers to and from overseas agencies such as EU.
- What is exchange rate?
price of one currency in terms of another.
- How does exchange rates impact current account?
- Demand for exports as a result of changes in the prices.
- demand for the country’s goods, which influences demand for currency appreciating the value of the currency.
- What are the 5 reasons for deficit and surpluses?
- Quality of domestic goods.
- Quality of foreign goods.
- Price of domestic goods.
- Price of foreign goods.
- Exchange rates between countries.
- What are the 4 impacts of a current account deficit?
- leakages from the economy
- inflation
- low demand for exports.
- funding the deficit.
- What are 5 business activities that damage the environment?
- Mining
- power generation
- chemical processing
- agriculture
-construction
- What are the 4 types of pollution businesses contribute to?
- visual pollution
- noise pollution
- Air pollution
- Water pollution
- What are the 3 ways air pollution is occurred due to business activity?
- burning of fossil fuels
- emissions from factories and other business activities.
- Agricultural activities.
- What are the 3 main causes of water pollution?
- industrial waste
- Marine and ocean dumping
- Sewage
- What are the 6 measures government intervenes to protect the environment?
- Taxation
- Subsidies
- Regulation
- Fines
- Pollution permits
- Park provision
- What is income inequality?
- differences in income that exists between the different group of earners in society, that is the gap between the rich and the poor
- What are the 2 types of poverty?
- relative poverty
- absolute poverty
- What is absolute poverty?
- where people do not have enough resources to meet all of their basic human needs.
- What is relative poverty?
poverty that is defined relative to existing living standards for the average individual
- What is Lorenz curve?
- graphical representation of the degree of income or wealth inequality in a country
- What are the 3 reasons to reduce poverty and inequality?
- meet basic needs
- raise living standards
- ethical reasons
- What are the 3 ways the government uses to intervene to reduce poverty and income inequality?
- progressive taxation
- redistribution through benefit payments
- investment in education and health care.
- What is progressive taxation? regressive taxation?
- progressive taxation is where the proportion of income paid in tax rises as the income of the taxpayer rises.
- regressive taxation is a tax system that places burden of the tax more heavily on the poor.
