4.1 Globalisation Flashcards
Economic Growth
An increase in a country’s productive capacity
Mature markets / Developed economies
An economy which has already undergone high growth
Emerging markets
Country where there is already rapid growth and further scope for potential growth
Economic Superpowers
Countries with global influence (economically, culturally and geopolitically) and power
Gross Domestic Product (GDP)
The total value of a country’s output over a given period of time
Exports
Goods that are produced by a country and are sold to another
Imports
Goods that enter the country from abroad
Specialisation
Process of concentrating on and becoming an expert in a particular field
Comparative Advantage
Country can produce a good or service at a lower opportunity cost than another
Foreign Direct Investment (FDI)
Business from one country decides to establish itself in another country
Multinational Company
A firm that operates in more than one nation, means they’ve undertaken FDI
Globalisation
World is becoming increasingly more interconnected as a result of massively increased trade and cultural exchange
Trade Liberalisation
International trade is made easier through relaxation of tariffs and barriers
Structural Change
Economic condition that occurs when an industry changes the way it operates e.g primary sector (agriculture) –> secondary sector –> tertiary sector
Protectionism
Practice of protecting a country’s domestic industries from foreign competition
Tariff
Tax placed on an imported good, which increases prices to customers and decreases demand
Import Quota
A physical limit placed on the amount of imports allowed to enter a country in a given time period, minimise EOS
Government Legislation
Restricts trade by providing obstacles that make it harder for international firms to do business and may put them off entering the market
Domestic Subsidies
Capital given to firm within the government’s economy to help them in the market
Trading Blocs
Type of intergovernmental agreement to reduce regional trade barriers
Free Trade
Trade that takes place between countries without protectionism e.g no tariffs or quotas
Expansion of Trading Blocs
Process of more countries joining an existing trading bloc
Saturated Markets
Market no longer generating new demand due to competition or decreased need, low growth potential
