Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics Paper 2 > 2.4 Life in a Global Economy > Flashcards

2.4 Life in a Global Economy Flashcards

1
Q

Define Globalisation

A

The growing interconnectivity of different countries stemming from an improvement in communication and trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Define FDI

A

Big businesses investing in new markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What 2 things does FDI do for an economy?

A
  • Creates jobs

- Enhances prosperity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

How do some governments encourage investment into their country?

A

Offer incentives for investors like reduced tax

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Define ‘World Trade and GDP’

A

Measure of output and income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How has World Trade changed with globalisation?

A

It has become easier and therefore more common

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

How has globalisation affected the GDP of smaller countries?

A

Increased

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

How has globalisation led to increased migration?

A

International trade enhances competition so social structures change as more skilled workers are required

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Give the 5 factors that have led to globalisation in the last 50 years?

A
  • Trade Liberalisation
  • Capital Market Liberalisation
  • Political change in the USSR and China
  • Reduced cost of travel and transport
  • Increased significance of global transnational companies
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Explain what Trade Liberalisation is

A

Trade becoming easier and more common

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

How has Trade Liberalisation led to globalisation?

A

Makes markets more competitive and increases exports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is Capital Market Liberalisation?

A

Moving large sums of money from one economy to another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

How has Capital Market Liberalisation led to globalisation?

A

More free trade has fostered economic growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

How can Capital Market Liberalisation be bad for the global economy?

A

A disaster in one country is going to have a big effect in other countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

When did the USSR collapse?

A

1989

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Why has the cost of travel and transport fallen?

A

Advancements in technology have made it easier and cheaper

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

How is globalisation important in dynamic markets?

A

It allows businesses to quickly make decisions and communicate quickly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Define containerisation

A

The advancement of technology of using container ships

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How has the increase of transnational companies led to globalisation?

A

Retailers have been able to shop around for cheaper products in wider markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What is the fact that can be used in explaining the increase of transnational companies?

A

Some firms have GDP higher than entire countries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define what is meant by a ‘Developed Country’

A

A country that has industrialised long ago and has very high living standards

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Give 3 characteristics of a ‘Developed Country’

Primary, Tertiary, Skilled workers

A
  • Small Primary Sector
  • Large Tertiary Sector
  • Highly skilled and educated population
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Give 5 characteristics of a ‘Developing Country’

Primary, Secondary, Skilled workers, Welfare Sector, Labour

A
  • Large Primary Sector
  • Small Secondary Sector
  • Unskilled Workforce
  • Small Welfare Sector
  • Labour intensive
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Give 4 characteristics of an ‘Emerging Economy’

Economic Growth, Living Standards, Expansion, Migration

A
  • Very high economic growth
  • Rapidly rising living standards
  • Expansion fastest in manufacturing
  • Huge rural to urban migration
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Give the 5 main indicators of economic growth

A
  • HDI (Human Development Index)
  • GDP per Capita
  • Literacy Rate
  • Health
  • Mean/Median incomes
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Give 1 reason that someone would measure economic growth with GDP per capita

A

Gives an average income that’s easily comparable with other countries

27
Q

Give 2 reasons why it could be bad to measure economic growth with GDP per capita

A
  • Exchange rates skew the data

- Won’t account for the hidden economy

28
Q

Give 1 reason that someone would measure economic growth with the Literacy Rate

A

Shows the government’s investment into education

29
Q

Give 2 reasons why it could be bad to measure economic growth with the Literacy Rate

A
  • Can be difficult to measure

- Doesn’t only show economic growth

30
Q

Give 2 reasons that someone would measure economic growth with Health

A
  • Shows government investment into healthcare

- Can be reflective of wages (healthcare isn’t free)

31
Q

Give 2 reasons why it could be bad to measure economic growth with Health

A
  • Can be misleading

- Doesn’t only show economic growth on its own

32
Q

What is the HDI?

A

A composition of Gross National Income with life expectancy and schooling years

33
Q

What range of numerical values can the HDI take?

A

0-1 scale

34
Q

Give 2 reasons that someone would measure economic growth with the HDI

A
  • Easily collectable data

- More representative than a factor on its own

35
Q

Give 2 reasons why it could be bad to measure economic growth with the HDI

A
  • Doesn’t show spread

- Doesn’t show unemployment

36
Q

Give 1 reason that someone would measure economic growth with Mean/Median incomes

A

Can provide some additional information about income distribution and living standards

37
Q

Give 1 reason why it could be bad to measure economic growth with Mean/Median incomes

A

Can’t tell the effects of inequality

38
Q

Define specialisation

A

When an individual, firm or country concentrates on the production of a limited range of goods

39
Q

Give an advantage of specialisation for a business

A
  • Gain a competitive advantage through pricing
40
Q

Give 2 advantages of specialisation on an economy

A
  • Jobs created

- Exports increase which increases AD

41
Q

Give a disadvantage of specialisation

A

Risk isn’t spread

42
Q

Define Comparative advantage

A

A natural ability to produce a good for a lower cost than competitors (e.g. tropical countries with tropical fruits)

43
Q

Define Absolute advantage

A

An ability for a country/firm to produce a product using less resources than another

44
Q

Define Trading Bloc

A

The umbrella term for groups of countries that come together to conduct free trade

45
Q

Give the 3 types of Trading Bloc

A
  • Free Trade Area
  • Common Market
  • Single Market
46
Q

Define Free Trade Area

A

Groups of countries that trade freely with few or no trade barriers

47
Q

Give the 2 features of a Common Market

A

Free international Trade

Free Movement of Goods and People

48
Q

What is meant by a single market?

A

Member countries agreeing to harmonise their regulations so all businesses are on a level playing field

49
Q

Give 2 advantages for a business of being in a Trading Bloc

A
  • Encourages Efficiency as competition increases

- No retaliation through tariffs or anything

50
Q

Give an advantage for the economy of being in a Trading Bloc

A

Exports increase which boosts AD

51
Q

Give a disadvantage for the economy of being in a Trading Bloc

A

Imports alos increase which reduces AD through the BOP

52
Q

Give 2 disadvantages for a business of being in a Trading Bloc

A
  • Limits them to trade with only member countries

- Consumer choice is expanded so demand may fall as cheaper alternatives are discovered

53
Q

Define visible import

A

Tangible goods that have to be driven through the channel tunnel or air-freighted

54
Q

Define Invisible import

A

Services (e.g. tourism, finance)

55
Q

Give an advantage of being in a common market for a business in terms of competitive advantage

A

Can find workers from abroad with the same skill set who will work for less

56
Q

Define depreciation

A

When the market value of a currency falls against another

57
Q

Define appreciation

A

When the market value of a currency rises against another

58
Q

Draw the graph for appreciation

A

see poster

59
Q

Draw the graph for depreciation

A

see poster

60
Q

What is the effective exchange rate?

A

A weighted index of exchange rates which rolls all foreign currencies together in proportion to their relative importance in the economic trade pattern

61
Q

What does a rising figure in the effective exchange rate mean?

A

They are less likely to be competitive

62
Q

What does a falling figure in the effective exchange rate mean?

A

Depreciation

63
Q

What is the result of depreciation on the BOP?

A
  • more exports

- less imports

Economics Paper 2 (6 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions