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economics unit 2 > aos 3 > Flashcards

aos 3 Flashcards

1
Q

global inequality

A

60% live in low income countries
11% survive on incomes below extreme poverty line

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2
Q

extreme poverty

A

a condition charcterised by severe deprivation of basic human needs (food, safe drinking water, sanitation, health, shelter, education + information. depends not only on income but also on access to g+s

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3
Q

developing

A

developing is used to refer to poorer countries that have a low level of economic development + may be in the process of improving their level of eco development

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4
Q

development

A

multidimensional process involving economic, social, political and istitutional chnages that are needed to improve the daily material + non-material wellbeing of all in society

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5
Q

evidence of development

A

poverty rates declining
improved job opportunities + decrease unemployment
distrib of g+s = more equal
ppl = healthier + more literate + better clothed + nourished + live longer
less eco + social insecurity
ppl = happier
eco act = enviro sustain

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6
Q

GDP as a measure of development

A

↑ GDP ->↑ income -> ↑ consumption -> ↓ poverty -> ↑ living standards
limit of GDP:
> exclude non-marketed g+s
> x distinguish b/w monetary that improve and decrease welfare
> based on estimates
> x account value associated w/ depletion of nations stock of natural capital/neg externalities
> x account value of leisure time

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7
Q

HDI indicators

A

life expect
infant mortality
access to basic g+s
access to healthcare
risk of disease
access to edu
literacy rate
access to tech
male/female equality
govt spending priorities

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8
Q

policies to lift investment levels

A
  1. set up supervise + run secure banks + financial institutions to collect household savings -> available for financing higher levels of investment required to grow prod capacity
  2. protect rights of all ppl -> fair + efficient -> greater certainty + incentive for invest + expand/ live safe + happy
  3. international aid -> lift public sector investment levels + grow productive capacity
  4. ensure rich ppl pay required taxes to help finance public investment + infrastructure projects
  5. govt incentives -> encourage private investment -> promote self-sufficiency + security in food + comm services
  6. measures -> avoid wasting/misusing govts limited financial resources/avoid adding to repay debt
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9
Q

govt intervention: provision of basic economic + social infrastructure

A

quality edu + health/electricity/water supply/ transport/ communications + law + order
lift efficiency of resources, grow nations productive capacity/ lower unemployment/ lift income/ alleviate poverty/ improve quality of daily life

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10
Q

manage debt levels

A

poor country debt = high t/f need cut to manageable levels
‘white elephant’ projects -> add little to welfare e.g military spending
govts held accountable for spending

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11
Q

reform govt and key national institutions

A

poor countries need govt reform
vital for freedom of speech + press -> admin transparency -> hold govt accountable -> reduce incompetence corrupt + war

strong legal framework -> protect rights of workers/ child labour = illegal/ gain edu/ civil rights / protect enviro/ promote strong price competition

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12
Q

reduce trade barriers and protection by rich countries

A

rich nations -> protect farmers farmers/manufacturing/firms/ + miners from comp by poorer countries (export)
heavy protections (tarriffs/subsidies + import quotas)
expand free trade

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13
Q

reduce income inequality

A

democratic elect/ fair progressive tax
tax revenue promote develop via:
> improve edu + health
> deliver basic welfare -> some dignity
> provide basic eco infrastructure inc water + elect

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14
Q

reduce pop pressures

A
  1. govt persuade ppl for smaller fam via advertise + edu
  2. govt enhance fam planning facilities -> advice on contraceptives + health practices
  3. govt pass legislation -> promote + enforce gender equal -> fall in birth + increase develop
  4. govt use neg tax + pos welfare incentives
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15
Q

economic globalisation

A

reduce/remove barriers limiting free move of bus, trade, invest + labour across national borders

open up of world trade
Internationalisation of financial markets​
The increasing importance of global corporations and other institutions that span national borders​
The internationalisation of production with individual firms competing with firms in the world economy​
The increased mobility of people and other factors of production, capital, information, ideas and goods and services​

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16
Q

globalisation

A

taking international specialisation in the production by countries of particular goods and services, to an even greater level, thereby increasing the economic interdependence and interconnectedness of all countries involved through international trade.​

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17
Q

Trade Liberalisation

A

any govt policy initiative designed to promote free trade/ reduce restrictions + barriers to free trade

Removing barriers forces Australian producers compete on a level playing field  usually by seeking to boost productivity and cut costs in order to maintain international competitiveness.​

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18
Q

Export promotion strategies (indirect measures)

Deregulation and reform of the labour market

A

Aimed to keep wage cost in line with worker efficiency therefore improve efficiency and productivity​

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19
Q

export promotion strategies (indirect measures)

Cuts in the company tax rate

A

Aimed at improving cost competitiveness and therefore make our firms more internationally competitive ​

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20
Q

export promotion strategies (indirect measures)

national infrastructure projects

A

The government (often in partnership with private business) invest in improving infrastructure in Australia to provide the framework required for businesses to be efficient and therefore internationally competitive​

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21
Q

export promotion strategies (indirect measures)

education + training policies

A

Skilled and educated workers are more innovative and efficient. Therefore labour output for wage input is improve and so to is international competitiveness.​

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22
Q

International trade agreements ​

A

Bilateral trade agreements- treaties signed by two countries involving the reduction and removal of industry protection) ​

​

Multilateral trade agreements- treaties signed by a number of countries and are aimed at promoting trade and reducing industry protection. ​
Theses include our membership with international monetary fund (IMF) and the world trade organisation (WTO), both of which seek to develop global economic trade. ​

23
Q

Advantages of globalisation & trade liberalisation ​

A
  • Increased AD (X)​
  • Increased AS (Access to resources) ​

-Increased access to a variety of good/services​

-Increased efficiency- due to competition ​

-Encourages international investment in Australia

24
Q

Considerations of globalisation & trade liberalisation

A

Increase volatility due to connection/reliance on the rest of the world (GFC)​

Increased competition forces some businesses into closure​

Biosecurity ​

Negative externalities​

National defence

25
Q

factors accelerating globalisation

relaxation of government controls and adopt freer trade

A

World Trade Organization promoting eco benefits of freer trade -> govt reduce protection of local industry by:
cut tariffs on imports
abolish quotas or quantity controls on particular types of imports
lower payment of subsidies to local firms

26
Q

factors accelerating globalisation

faster more efficient + cheaper transport + communication

A

e.g containers that can be stacked -> efficiency
transport costs re buy + sell goods = less important as proportion of final selling price
faster transport + lower costs -> bus = more aware of profit opp to move resources + prodn b/w countries -> nation specialise in prodn, encouraging expansion of global bus + international trade

27
Q

factors accelerating globalisation

increased mobility of global capital and investment by businesses

A

N+L resources = hard to move b/w countries but money capital + invest resources = not

move investments in + out of countries -> flexibility on decision making for bus -> change + restructure operations as conditions change in countries

28
Q

factors accelerating globalisation

improved availability of new tech

A

nultinationals can manufacture goods even in low income countries where edu = low
new tech allow electronic banking + invest -> encourage international trade + global financial transactions
evolution of fast + affordable internet -> advertise + c’er can shop online

29
Q

factors accelerating globalisation

general belief that glibalisation will improve living standards

A

encourages countries tospecialisein particular areas of production where they have acomparative cost advantageover other countries-> improves efficiency in the way nations use their limited resources -> lowers the unit cost and price of goods and services and expands the volume of world trade between countries -> raises GDP levels for those involved, increases employment opportunities, lifts real incomes and purchasing power, and ultimately strengthens material living standards.

30
Q

factors accelerating globalisation

economies of scale

A

When a business produces, it can experience cheaper production costs per unit of its output, the higher the volume of output it produces.

This is called achieving economies of scale.

31
Q

Impact of Globalisation
the rise of asia

A

asia = worlds largest p’er of goods

Integration into the global economy:
Asia = high lvls relatively unskilled, cheap labour for multinational companies prepared to relocate to those countries

The influx of people into Asian cities has caused a massive increase in demand for infrastructure and housing, and consequently building materials and energy.

32
Q

Impact of Globalisation
The rise of multinational companies

A

operate in more than one country but are based in one country -> take advantage of many opportunities offered by the factors that also contributes to increased globalisation.

MNCs have taken advantage of:
Economies of scale
Advances in technology
Differences in wages
Government regulations

33
Q

impact of globalisation on Aust
lower c’er prices + slower inflation rates

A

aust c’ers = buy quality g+s @ less $. p.p of h.h incomes rise -> higher material L.S
measures to keep price low:
> tariff cuts -> comp
> labour market reforms (use enterprise bargaining + performance based pay)
> privatisation of govt businesses
> stronger comp policy inv ACCC
> deregulation of capital market
> tax reforms (lower taxes)

34
Q

impact of globalisation on Aust
greater c’er choice + improved satisfaction of wants

A

globalisation -> ↑ c’er choice b/c h.h + bus = purchase what like in market around world.
surge of e-commerce -> easy

35
Q

impact of globalisation on Aust
are we more ethical consumers

A

global communications -> ↑ ethical aware when choosing g+s.
concept of free trade = imp

36
Q

Impact of globalisation on aust
globalisation affected aust workers + labour market

A

changes to wage system:
>spread of enterprise bargaining + productivity-based agreements negotiated on ↑ flexible firm-by-firm basis -> now cover 85% of all emp
>simplification + scale back of agree covered under old centralised, complex + inflexible minimum wage system
> promotion of union amalgamation + erosion of union influence in wage negotiations
> some relaxation of the unfair dismissal laws so firms get rid of unproductive + unnecessary workers

37
Q

impact of globalisation on aust
jobs + unemployment

A

partial deregulation of aust labour market, which followed trade liberalisation + increased global comp, was intended to closely link wage rises to productivity/worker efficiency

38
Q

impact of globalisation on aust
effect rate of eco growth

A
  1. better efficiency. openness b/c tariffs + less protection -> force allocation of resources efficiently
  2. cost cutting
  3. lower prodn costs
    4, expansion of export market -> grow faster b/c x tariffs
  4. more foreign investment
39
Q

impact of globalisation on aust
aust incomes + material L.S

A

aust grow prodn faster that pop
↑ p.p b/c higher income + lower prices -> L.S rise quickly

40
Q

impact of globalisation on aust
affect govt

A

pressured govt to implement ↑ AS, efficiency-promoting policies:
> reduce company rate tax
> build efficient national infrastructure
> promote comp via strengthen competition + c’er act -> price surveil + x anti-comp behaviour

41
Q

impact of globalisation on aust
shrinking manufacturing sector

A

loss of jobs
natural disadvantage b/c geo location -> add cost to products exported
aust has poor economies of scale b/c small domestic eco -> unable to reduce average costs to level of other major eco
emerging comp -> restructure w/ small lay offs + major redundancies

42
Q

impact of globalisation on aust
outsourcing of services

A

company using external organisation to provide services/undertake some operations of company -> lose jobs

cheaper labour -> reduce labour cost / reduce regulations/ proximity = closer to resources + cust/ access higher level of skill + expertise

43
Q

impact of globalisation on aust
financial market

A

deregulation of financial market exposed aust financial sector to int comp -> need to respond effectively to global pressures

domestic and foreign banks compete -> excess credit

deregulation -> large floes of capital into + out of aust

44
Q

impact of globalisation on aust
undermine national sovereignty + created other problems

A

national defence -> future resource + national security in int conflict may be compromised

possible loss of govt tax revenue -> companies shift profits to lower tax subsidiaries in low tax countries -> deprive aust govt from tax needed to pay for comm services

housing affordability -> massive purchases of property by foreign buyers -> expensive for young families - finding home ownership unaffordable

45
Q

impact of globalisation on aust
affect enviro

A

GHG emissions increased by 70% b/c transport

increased agriculture prodn -> use chemical fertilisers + pesticides that poison soil + blue-green algae

use irrigation to increase crop + meat prodn for export -> soil salinity

increased water use for growing agricultural exports -> export water from driest continent -> water restrictions

46
Q

impact of globalisation on aust
increased enviro accountability by multinational firms

A

multinational corps becoming better global citizens b/c:
>fear of poor rep -> c’er boycotts + decrease sales + profit
> bad publicity in media
> backlash by shareholders = reflected in fall in company share price
> fear govt will pass strict legislation -> limit operations
> prosecution under environmental laws
> desire + need for firms to retain competent + ethical staff

47
Q

Rise of Multinational corporations:
Economic benefits

A

MNCs provide better pay -> impact competitors b/c take talent from domestic bus -> strain b/c x have best talent

40% higher pay -> employees benefit

extra pay minimise turnover -> ↓ cost for monitor work -> ↑ income + living standards

48
Q

Rise of Multinational corporations:
Economic costs

A

after tax profit returned to country of origin -> x local govt get benefit -> x develop + outflow of income

POSSIBLE exploitation of workers inc child labour

49
Q

Rise of Multinational corporations
social/ethical costs

A

large corp = accused of spreading homogenous products + culture arnd wrld

replace local culture b/c spread western values

put diversity of other producers at risk by mass generating homogenous product

50
Q

Rise of Multinational corporations
social/ethical benefits

A

some MNC embraced fair trade movement

MNC provide better price for local farmer (supplier) -> products @ better value

Fair Trade -> fair price for g+s -> p’ers remunerated fairly

51
Q

positive impact of MNCs on enviro

A

Fair trade become more popular + c’er want products enviro ethical
MNC’s consistent emphasis on CSR

52
Q

negative impact of MNCs on enviro

A

↑ transportation of products -> pollution

13% of wrld carbon emissions = transport

MNC encourage culture of excessive/unnecessary consumption -> deplete natural resources/deforestation/damage to biodiversity

53
Q

Globalisation + ↑ inequality in countries

A

MNC empoly most skilled -> pay emp more than local -> widen gap b/w low + high skilled -> worsen inequality

local bus face ↑ comp + lower income levels

54
Q

Globalisation + food security

A

foreign = interest in buying aust farms ->13.6% land = foreign owned -> compromise in future food security -> may need to import

economics unit 2 (3 decks)

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