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Economics EDEXCEL IGSCE > 2.2 The Global Economy Unit 35 - 39 > Flashcards

2.2 The Global Economy Unit 35 - 39 Flashcards

1
Q
  1. What is globalization?
A

it is the growing interconnection of the world’s economies.

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2
Q
  1. What is interdependence?
A
  • where the actions of one country or large firm will have a direct effect on others.
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3
Q
  1. What are the 5 features of globalization?
A
  • goods and services are traded freely across international borders.
  • free to live and work in any country they choose.
  • high level of interdependence between nations.
  • capital can flow between different countries.
  • the free exchange of technology and intellectual property.
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4
Q
  1. What are the four reasons for globalization?
A
  • fewer tariffs and quotas
  • reduced cost of transport
  • reduced cost of communication
  • increased significance of multinationals
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5
Q
  1. What is a saturated market?
A

market in which there is more of a product for sale than people want to buy.

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6
Q
  1. Who are the 6 things affected by globalisation?
A
  • individual countries
  • governments
  • producers
  • consumers
  • workers
  • the environment
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7
Q
  1. What are the 6 advantages to individual countries of globalization?
A
  • high GDP
  • growth
  • contribute and increase wealth in the country
  • more output
  • high employment
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8
Q
  1. What is the disadvantages to an individual country of globalization?
A
  • due to interdependence economy can be affected badly.
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9
Q
  1. What are the 4 advantages to a producer of globalization?
A
  • access to huge markets.
  • lower costs.
  • access to labor.
  • reduced taxation.
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10
Q
  1. What are the 5 advantages of consumers of globalization?
A
  • cheaper goods
  • wider choice
  • latest technology
  • quality of goods
  • improved living standards.
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11
Q
  1. What are the 3 advantages to workers of globalization?
    1 disadvantage to workers?
A

Ad:- more job opportunities
- learn new skills
- can get paid more
Dis: offshoring:- practice of getting work done in another country in order to save money.

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12
Q
  1. What is a disadvantage of globalization to the environment?
A

unsustainable economic growth:- economic that is not possible to sustain without causing environmental problems.

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13
Q
  1. What is the 2 advantage of globalization to the government?
A
  • increase in tax revenue
  • encouragement of starting up new business.
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14
Q
  1. What are multinational corporations?
A
  • companies that operate in many different countries.
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15
Q
  1. What are the 6 features of MNCs?
A
  • Huge assets
  • highly qualified and experienced professional executives and managers.
  • powerful advertising and marketing capability.
  • highly advanced and up-to-date technology.
  • highly influential both economically and politically.
  • very efficient since they can exploit huge economies of scale.
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16
Q
  1. What is Foreign Direct Investment? (FDI)
A

FDI, or inward investment, occurs when a company makes an investment in a foreign country.

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17
Q
  1. What are the 4 reasons for the emergence of MNCs/ FDI?
A
  • economies of scale
  • access to natural resources/ cheap materials.
  • Lower transport and communication costs.
  • Access to customers in different regions.
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18
Q
  1. What are the four ways governments actively seek FDI?
A
  • offering tax breaks, subsidies, grants, and low-interest loans
  • lifting restrictions and relaxing regulations to make investing easier for foreign firms
  • investing in their own infrastructure.
  • investing in education so that people can get jobs in foreign countries.
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19
Q

20, What are the 5 advantages to governments of MNCs and FDI?

A
  • Job creation
  • investment in infrastructure.
  • developing skills.
  • developing capital
  • ## contributing to taxess
20
Q
  1. What is tax avoidance?
A
  • practice of trying to pay less tax in legal ways.
21
Q
  1. What is repatriation?
A
  • where a multinational returns the profits from an overseas venture to the country where it is based, typically from a developing country to a developed country
22
Q
  1. What are reserves?
A
  • are the amount of something valuable, such as oil, gas…
23
Q
  1. What are the 3 disadvantages of governments of MNCs/ FDIs?
A
  • Tax avoidance
  • environmental damage
  • moving profits abroad.
24
Q
  1. What is international trade?
A

international trade is trade between nations.

25
Q
  1. What are the 3 reasons for international trade?
A
  • obtaining goods that cannot be produced domestically.
  • obtaining goods that can be bought more cheaply from overseas.
  • selling off unwanted commodities.
26
Q
  1. What is free trade?
A
  • situation in which the goods coming into or going out of a country are not controlled or taxed.
27
Q
  1. What are the 3 advantages of free trade?
A
  • lower prices and increased choice for consumers.
  • lower input prices.
  • wide markets for businesses.
28
Q
  1. What are 2 disadvantages of free trade?
A
  • competition for domestic businesses.
  • unemployment in domestic firms.
29
Q
  1. What is protectionism?
A
  • approach used by governments to protect domestic producers
30
Q
  1. What is dumping?
A
  • where an overseas firm sells large quantities of a product below cost in the domestic market.
31
Q
  1. What are trade barriers?
A
  • measures designed to restrict imports.
32
Q
  1. What are the 7 reasons for protectionism?
A
  • prevent dumping
  • protecting employment
  • protecting infant industries
  • to gain tariff revenue
  • preventing the entry of harmful or unwanted goods.
  • reduce current deficits.
  • retaliation
33
Q
  1. What are infant industries?
A

new industries yet to establish themselves.

34
Q
  1. What are the 3 methods of protectionism?
A
  • tariffs
  • quotas
  • subsidies
35
Q
  1. What are tariffs/ custom duties?
A
  • a tax on imports to make them more expensive.
36
Q
  1. What is embargo?
A

official order to stop trade with another country(it is an extreme form of a quota)

37
Q
  1. What is quota?
A
  • physical limit on the quantity of imports allowed into a country.
38
Q
  1. What is bi-lateral trade agreement?
A

trade deal between only 2 countries.

39
Q
  1. What impact do tariffs and quotas have on a. Import quantity? b. Price of imports. c. demand on imports?
A

-a. reduces import quantity
-b. increase the price of imports
-c. reduction in demand for imports.

40
Q
  1. What impact do subsidies have on producers?
A

it helps them to produce more, or they are forced to reduce prices.

41
Q
  1. What is a trading bloc?
A
  • groups of countries situated in the same region that join together and enjoy trade free of trade barriers.
42
Q
  1. What are the 5 types of trading bloc?
    define
A
  • Preferential Trading Areas(PTAS) :- this type of arrangement means that members agree to remove trade barriers on a range of goods and services.
  • Free Trade Areas:- trade between members of an FTA is completely free of trade barriers.
  • Custom unions:- A customs union is a type of trade bloc that is composed of a free trade area with a common external trade barrier.
  • Common markets:- a group of countries imposing few or no duties on trade with one another and a common tariff on trade with other countries, also allowing free movement of labor and capital.
  • Economic unions:- An economic union is a free movement of goods, services, money, and workers between nations, facilitated by coordinating social and financial policies.
43
Q
  1. What are the advantages of trading blocs on member states?(6)
A

– goods will be cheaper
-consumer choice
- faster economic growth
- exploit economies of scale
- extra competition improves the quality of goods and encourages innovation.
- reduces border conflict.

44
Q
  1. What are the 5 disadvantages of trading blocs on member states?
A
  • financial cost to the government.
  • exploit consumers in the bloc.
  • rely too heavily on trade within the bloc.
  • also miss out on opportunities in other world markets
  • inefficient producers may be protected from businesses outside the trade bloc then consumers might end up paying more for goods and services.
  • unequal resources leading to political tension.
45
Q
  1. What is a disadvantage of trading bloc on a non-member states?
A
  • will face common trade barriers and may be forced to find new markets.
46
Q
  1. What are the 3 examples of trading blocs?
A
  • NAFTA(north American Free Trade Agreement) :- the USA, Canada and Mexico.
  • ASEAN(association of southeast Asian nations) :- Thailand, Vietnam, Malaysia, Indonesia, the Philippines, and Singapore.
  • SACU( South African Customs Unions):-(bostswana, Lesotho, nambia

Economics EDEXCEL IGSCE (13 decks)

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