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EDEXCEL Economics B Paper 2 > 3.1 Globalisation > Flashcards

3.1 Globalisation Flashcards

1
Q

Define globalisation

A

The increased interconnectivity of nations on a global level, both economically and politically

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2
Q

How many people has the growth of China lifted out of poverty?

A

800 million

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3
Q

How can globalisation be negative for a firm?

A

Increased competition

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4
Q

Define real value

A

A measure of the value of money with the effect of inflation removed

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5
Q

Define nominal value

A

A measure of the value of money including inflation

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6
Q

What’s the formula for Real Value?

A

Nominal Value
———————– (x100%)
Price Index

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7
Q

Why is it important to use real values when analysing market data from different countries?

A

Different countries have different taxes

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8
Q

What’s the formula for index number?

A

Current value
————————— (x100%)
Base Year Value

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9
Q

Give 4 advantages of the emergence of the BRIC economies on UK business

A
  • Outsourcing
  • New markets
  • Cheaper raw materials
  • Tourism industry will increase
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10
Q

Define specialisation

A

When a business, country or region focus on the production of a limited range of goods and services

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11
Q

Give 3 advantages to a business of specialisation

A
  • Boost productivity and sales
  • Increase the quality of good/service
  • Induces investment
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12
Q

Give 2 potential disadvantages of specialisation to a business

A
  • Risk isn’t spread

- Footloose multinationals could move to cheaper countries

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13
Q

Define trade liberalisation

A

The process of reducing trade barriers to induce free trade

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14
Q

Define trade barrier

A

An umbrella term for things that make trade more difficult

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15
Q

Define tariff

A

A tax on imports

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16
Q

Define quota

A

A limit on import

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17
Q

Define subsidy

A

A government payment to reduce business costs and boost output

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18
Q

Give the 6 reasons as to why trade liberalisation has increased

A
  • WTO
  • Rise of MNCs
  • Political change
  • Technology advancements
  • Specialisation
  • Globalisation
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19
Q

Give 3 benefits to the world economy of trade liberalisation

A
  • Countries can benefit from their comparative advantage
  • Reduces overproduction
  • Allows firms to operate at their most productive
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20
Q

Give 2 ways in which trade liberalisation can hinder the individual economy of countries

A
  • Increased competition can bankrupt countries

- Prevents governments protecting infant industry with protectionist policies

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21
Q

Define FDI

A

Capital investment from one economy to another

22
Q

Between what type of countries is FDI highest?

A

Developed countries

23
Q

Define trade bloc

A

A group of countries who have an agreement for free trade

24
Q

Which type of trade bloc offers no trade barriers between member countries alongside separate policies for trade with external nations?

A

Free Trade Area

25
Q

Which type of trade bloc offers no trade barriers between member nations but a single policy that covers external nations?

A

Customs Union

26
Q

Which type of trade bloc offers no trade barriers between member nations with a single policy that covers external nations and the free movement of people?

A

Common Market

27
Q

What type of trade bloc offers the removal of all barriers to the movement of goods, labour and capital?

A

Single market

28
Q

What is ASEAN?

A 
A free trade area between:
Indonesia
Malaysia
Philippines
Singapore
Thailand
29
Q

What is NAFTA?

A

A free trade area between:
Canada
USA
Mexico

30
Q

Give 5 advantages of a country being in a trading bloc

A
  • Exports increase, boosting AD
  • Cheaper imports
  • Risk is spread
  • Attracts FDI
  • Competition makes their businesses more efficient
31
Q

Give 3 disadvantages of a country being in a trading bloc

A
  • Unethical firms can struggle with regulations
  • No government revenue from tariffs
  • External tariffs can increase the cost of raw materials
32
Q

Define protectionism

A

Government protection of home infant industry by controlling imports with tariffs

33
Q

Give 4 examples of non-tariff trade barriers

A
  • Packaging standards
  • Quota
  • Import ban
  • Quality Conditions
34
Q

Give 4 reasons for protectionism

A
  • Incubate infant industry
  • Response to import dumping
  • Employment protection
  • Raise government revenue
35
Q

Define import dumping

A

A country subsidising its goods so low that it injures industry

36
Q

Draw the Diagram for a tariff

A

See book

37
Q

What Is the potential downside of a tariff?

A

Retaliation

38
Q

Draw the diagram for a quota

A

See book

39
Q

What is the WTO?

A

An international organisation that aim to create free trade

40
Q

Give 3 advantages of the WTO on countries’ business

A
  • Avoids trade wars
  • Creates new trade opportunities
  • Encourages competitiveness
41
Q

Give 3 disadvantages / evaluation points about the WTO

A
  • Questions over their actual power
  • Stops protectionism
  • Unfavourable to poor countries
42
Q

What is the G20?

A

A group of the 20 richest countries in the world who gather to protect industry and create global financial stability

43
Q

What is the IMF?

A

A body who provide advice and loans to struggling countries

44
Q

What do the World Bank do?

A

Encourage development in poor countries through finance and advice

45
Q

What is meant by a bilateral trading agreement?

A

Trade between just 2 economies

46
Q

What is meant by a multilateral trading agreement?

A

Trade between more than 2 economies

47
Q

How does appreciation impact the BOP?

A

Imports increase
Exports decrease
————————-
BOP decreased

48
Q

What does appreciation do to employment levels?

A

Reduces them

49
Q

What is the eurozone?

A

The use of a single currency between groups of countries

50
Q

Why is there no manipulation of the exchange rate in the Eurozone?

A

There is a single currency

51
Q

Why can the Eurozone be very bad?

A

If one country becomes less competitive, it can be difficult for them to use the same currency as a booming country

EDEXCEL Economics B Paper 2 (6 decks)

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