4A Flashcards
Economic growth
Increase in the quantity of goods and services produced ion a country in a time period.
What is a emerging market
Economic growth=5%+ growth
BRICS
Philippines=7.7 in 2022
Affects on Individuals of a high rate of economic growth
More jobs
higher standard of living
Education
Healthcare
better infrastructure.
Affects of a higher rate of economic growth on businesses
More investment
increased sales
lower barriers to entry
increased government grants
-ves of high rate of economic growth
Increased inequality
higher inflation
competition from abroad
cultural dilution
increased pollution
increased congestion
International trade
The exchange of goods and services between countries
Why do countries trade goods and services
Countries have access to different natural resources so can produce certain products that others cannot.
Different countries have access to different technology so can produce different goods.
It promotes goodwill and strong relations between countries
products imported from overseas can satisfy demand levels
it gives consumers greater choice.
Larger markets for businesses
governments can earn money on trade through exporting
Import
Products made overseas, sold to your country
Export
product made in the UK, but sol abroad.
-ves of international trade
-taxes and tariffs lead to increased prices
-reliance on imported goods
-over-specialisation on specific products leads to an inability top respond to demand changes
-loss of small businesses-cannot compete with price of imported goods
increased U
Business specialisation
When a country or business concentrates on the production of as very specific group of goods and services
+ves of specialisation
-higher output
-increases quality
-greater efficiency
-lower prices
-EoS
-Ves of specialisation
-over reliation on imports
-vulnerable to changes in demand
-structural U
Globalisation
The growing integration of the world economies, leading to increasing interdependence
Factors contributing to globalisation
-less trade barriers
-reduced transport costs
-increased fdi
-increased migration
-ves of globalisation
-Only benefit richer countries
-richer become richer
dilution of local cultures
-increased pollution
race to bottom
-tax avoidance
What is FDI
Occurs when a business or government from one country to another invests in business operations in other countries.
eg nissan in Sunderland
How do some countries go about attracting FDI
-Tax breaks
-subsidies
-infrastructure investment
How can FDI be beneficial to country receiving it
-job creation
-training for workers
-sharing ideas
-investment in infrastructure
-increased consumer choice, lower prices
-multiplier effect from employment
How can FDI be beneficial to the company investing overseas
-lower production costs-cheaper workers and raw mats
-increased mkt size
brand recognition
govt incentives
How can FDI promote economic benefits in the country receiving it
-increased g and s
-increased tax rev
-trade surplus
-ves of FDI
-exploitation of workers
-exploitation of natural resources
-pollution
-structural U and Wipeout local bus
What is protectionism
The restriction of trade by a country, limit imports to protect businesses.
Purpose of Protectionism
-protect domestic jobs and structural U
-protect dumping of cheap products
raise tax rev
-prevent harmful goods
-improve trade figures
Main types of protectionism
-tariffs-tax on import
-quota-upper limit
-embargo- ban on imp
-subsidies for domestic bus
-legislation
-red tape
-ves of protectionism
-retaliation
-domestic business may rely on subside cushion and become inefficient
What is a trading bloc
A group of countries that agrees to reduce/eliminate trade barriers among members
Degrees of trading blocs
-Preferential trade area
-FTA
-Customs union
-Common market
-Economic union
examples of trading blocs
-Eu
-ASEAN
-Mercosur
-USMCA
+ves of trading blocs to members
-cheaper movement of g and s-cheaper raw mat
-greater availability of workers
-larger potential markets-greater sales
-Eurozone- No exchange rate transaction costs
-ves of trading blocs for members
-Strict trading bloc rules
-cost of joining a trading bloc + regular fees
- increased competition for domestic firms
-free movement of workers-take jobs
