4.1 Flashcards
GDP definition
value of all the goods and services product in a country within a year
emerging economy definition
market with rapid growth but also with a lot of risk
how does growth affect individuals and businesses
increases wages
growth rate of uk economy compared to emerging economies
uk economy slower growth rate compared to emerging economies
growing economic power of countries
Asia, Africa
Growth results from higher average incomes and development of neew incomes and markets
Increase in income –> greater demand
effects of economic growth on trade opportunities
increased FDI
opportunities to export to developing opportunities
effects of economic growth on employement patterns
Unemployment rates fall
Skilled worker level increases
- international businesses can recruit
Issues with gdp
GDP does not take inflation into account , increase in GDP could just be inflation rather than economic growth
GDP can be hard to compare across currencies
GDP per capita does not take into account income distribution
Indicators of Growth other than gdp
Health: life expectancy, mortality rates
Literacy : gives the quality of education
HDI
What is HDI
Combines statistics, longevity, basic education and minimal income
Figure between 0 &1
Import and export definition
Import- selling goods that are made in another country
Exports- selling domestic goods to other countries
FDI and business growth
FDI allows a business to benefit from comparative and competitive advantage directly being able to use a countries resources/ workers
Globalisation definition
The increasing integration and cooperation between countries and the growth of international trade
Factors contributing to increased globalisation
- Reduction of trade barriers/trade liberalisation
- Political change - democracy - better communication
- Reduced cost of transport and communication.
- increased significance of transnational companies. Bring cultures together
- Increased FDI
- Migration.
- Global population increase (increase in labour force)
Protectionism definition
Protecting domestic businesses against foreign competition
Tariffs
Tax on imports
- increases the price of imported goods making domestic businesses more competitive
Quotas
Physical limit set on the number of units that can be imported into a country
Subsidies
Government grants given to help exporting businesses so they can lower their prices to compete internationally
Trading bloc definition
Partnerships and agreements between nations to allow free trade and collaboration
EU ASEAN NAFTA
Eu- single market , common laws
NAFTA- North American free trade zone
ASEAN - SE Asian free trade zone
Benefits and drawbacks of trading blocs
+ opportunities to expand into new markets
+ benefit from comparative advantage
+ easier source labour
- infant industries vulnerable to large international competitors
