Business Paper 4 Vocab Flashcards
Disposable Income
The amount of money a household has available to spend and save after paying taxes
Economic Growth
An increase in a country’s productive capacity
Emerging Economies
The economies of developing countries where there is rapid growth, but also significant risk employment people in paid work
Human Development Index (HDI)
(HDI) a collection of statistics that are combined into an index, ranking countries according to their human development
Income Elastic
The percentage change in demand for a product is proportionately greater than the percentage change in income
Literacy Rate
Rate the percentage of adults (over 15) who can read and write
Primary Sector
The area of production involving the extraction of raw materials from the earth
Tertiary Sector
The production of services in the economy unemployment the number of people who are not in work but are actively seeking a job
Division of Labour
Different workers specialising in different productive activities
Exports
Goods or services that a firm produces in its home market but sells in a foreign market
Foreign Direct Investment (FDI)
Investing by setting up operations or buying assets in businesses in another country imports goods and services that are bought into one country from another
International Trade
Exporting (selling abroad) and importing (buying from abroad)
Invisible Trade
Trade in services rather than physical products
Specialisation
A production strategy where a business or country focuses on a limited number of products or services This results in greater efficiency, allowing for goods and services to be produced at a lower cost per unit
Tariffs
Taxes that are imposed on imports
Visible Trade
Trade in physical goods
Brain Drain
When highly educated and talented people find jobs overseas
Free Trade
Trade between nations without restrictions from barriers
Globalisation
The growing integration of the world’s economies
Multinational Companies
Companies that own or control production or service facilities outside the country in which they are based
Remittances
The money sent back to their country of origin by overseas workers
Trade Liberalisation
the removal of rules and regulations that restrict free trade.
World Trade Organisation (WTO)
An international organisation that promotes free trade by persuading countries to abolish tariffs and other barriers. It polices free trade agreements, settles trade disputes between governments and organises trade negotiations.
Administrative Barriers
Rules and regulations that make it difficult for importers to enter an overseas market.
Dumping
Where an overseas firm sells large quantities of a product below cost in the domestic market.
Import Quota
A physical limit on the quantity of imports allowed into a country.
Protectionism
An approach used by a government to protect domestic producers.
Subsidy
Financial support given to a domestic producer to help compete with overseas firms.
Trade War
Where two or more countries try to damage each other’s international trade by imposing trade barriers.
Common Market
A market where goods, labour and capital can move freely across the member states.
Economic Union
A type of trading bloc involving both a customs union and a common market
Free Trade Areas (FTA)
A region where member states remove all trade barriers between themselves, but each member state nevertheless keeps different barriers against non-member states
Trading Bloc
A group of countries that has signed a regional trade agreement to reduce or eliminate tariffs, quotas and other protectionist barriers between themselves
Single Market
A market where most trade barriers between members have been removed and common laws or policies aim to make the movement of goods and services, labour and capital between countries as easy as the movement within each country
