Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Econmics > Econmics Year 2 Topic 2 > Flashcards

Econmics Year 2 Topic 2 Flashcards

1
Q

Globalisation

A

The ever-increasing integration of the movement of the factors of production across Nations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Terms of trade

A

Index of export prices
———————————X 100
Index of import prices

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Absaulte advantage

A

If a country can produce a product or service using less resources then another country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Comparative advantage

A

If a country can produce a good or service at a lower opportunity cost then another country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Factor endowment

A

Lot of good quality factors of production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Transfer pricing

A

Reducing taxes on profits by selling goods at a low price internally from a high tax country to another part of the company in a low tax country

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Causes of globalisation

A

trade liberalisation, multinational companies and communications, IT and trade blocs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Impact of globalisation on
Consumers

A

Consumer choice, pricing and income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Impact of globalisation on
Workers

A

Employment and unemployment, migration and wages

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Impact of globalisation on producers

A

Specialisation, costs and markets and tax avoidance,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Benefits of trade

A

Specialisation,EOS,
choice,
Innovation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Costs of trade

A

Overdependence, jobs, risk, distribution of income, environment, loss of culture

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Trading blocs (order)

A

Preferential trade areas
Free trade areas
Customs union
Common markets
Economic union/monetary union

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Common market

A

-same product standerds
-free moment of factors of production
-common external tarrif

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Customs union

A

-free trade in products
-common external tarrif

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Economic union

A

-fully interested economically
-combined fiscal & monetary union

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Fiscal union

A

-central body has some power over gov borrowing,spending and uniform tax rates

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Free trade area

A

-free trade in goods and services
-own tarrif

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Monetary union

A

-same currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Multilateral or Pluto lateral trade agreement

A

-trade agreement between three or more contrys

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Preferential trading area

A

-trade liberalisation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Trade bloc

A

A group of country’s that have signed an agreement to reduce or abolish protectionist barriers between themselves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Trade creation

A

It become beneficial to buy a good or service within the trade bloc rather then outside it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Trade diversion

A

Goods from outside the trade bloc are diverted by a common external tarrif

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Restrictions on free trade

A

Tariffs,quotas,subsides,
administrative barriers (product standerds)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Reasons for restriction on trade (justifying protectionist policy’s)

A

Job protection, dumping, cheap Labour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Measures of competitiveness

A

-relative unit labour costs
(Total wages/total output)
-relative export prices
(Uk exported goods compared to main partners in index)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Factors influencing international competitiveness

A

-exchange rates
-productivity
-wage and non wage costs
(Company pension or taxes)
-regulation
-quality
-research and development
-taxation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

Benefits of international competitive

A

-Currant account surplus
-FDI
-employment
-Economic growth
-wage growth
-domestic purchasing power

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

Non tariff barriers

A

-subsides
-rules,regulations and red tape
-voluntary export agreement
-government procurement of domestic goods
-delays at ports and airports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

Justifying restrictions on imports

A

-Protecting infant industry’s
-protecting sunset industry’s
-job protection
-dumping
-cheap Labour
-defence purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

Protecting infant industry

A

New industry’s face higher costs then established foreign competition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

Dumping

A

Selling products below cost of production
(predatory pricing)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Protecting sunset industry’s

A

Likely to suffer from structural unemployment due to lack of transferable skills

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Reasons for capital flows:
(BOP)

A

-speculator
-capital flows for trade
-banks lending across borders
-individuals transferring funds
-FDI

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Bilateral exchange rate

A

The rate of exchange of one single currency for another single currency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Effective exchange rate

A

Measure of the exchange rate of a country’s currency, usually against a basket of currencies of a contrys major trading partners

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

Reasons why foreign exchange is brought and sold?

A

-international trade in good and services needs to be financed
-long term capital movements occur
(Inward investment and outward spending)
-this is an enormous amount of speculation in the foreign exchange markets

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Purchasing power parity Theory of exchange rates

A

States that exchange rates in the long term change in line with inflation rates between economies

40
Q

Fixed rate

A

The exchange rate is fixed to another currency
(Kroon to euro)

41
Q

Peg

A

Short term exchange rate is fixed but allowed slow long term movements

42
Q

Managed

A

A combination of fixed and float. Largely decided by market forces

43
Q

Managed float

A

Determined by supply and demand increases exchange rate

44
Q

Depreciation of a currency

A

When the value of currency falls because of free market forces or government intervention

45
Q

Devaluation of a currency

A

When a government or central bank officially fixes a new lower exchange rate for currantcy

46
Q

Exchange rate

A

The value of one currency expressed in terms of another currency

47
Q

Gold standard

A

An exchange rate where the value of the currency was fixed against the weight of gold

48
Q

Foreign exchange markets

A

Trading arrangements where currencies are bought and sold

49
Q

Revaluation of a currency

A

When a government or central bank officially fixes a higher exchange rate for a currency

50
Q

Appreciation of a currency

A

When the value of a currency rises beacuse of free market forces or government intervention

51
Q

Marshall Lerner condition

A

The combined eleaticitys of demand for imports and exports must be greater then one for a fall in the value of currency to improve BOP

52
Q

Expenditure reducing

A

In BOP, government policy’s to reduce the level of AD in order to reduce imports and boost exports

53
Q

Expenditure switching

A

I’m BOP, government polices such as devaluation or protectionism to reduce domestic buying and boost exports

54
Q

A debt-restructuring agreement
(BOP imbalance)

A

Where those owning debt agree to write down the value of the money they owe.
E.g £2 for every £10 they owe.
Causes high interest rates

55
Q

Progressive tax

A

% of tax paid increases as income increases

56
Q

Regressive tax

A

% of tax paid decreases as income increases

57
Q

Proportional tax

A

% of tax paid stays constant as income increases or decreases

58
Q

HDI

A

Human development index
-literacy rate or years of school
-life expectancy
-GNI per capita

59
Q

Dutch curse

A

-sells lots of natural gas
-currency goes up due to demand and supply falls
-rest of economy struggles as the only thing they export is gas

60
Q

Harrod domar -savings gap

A

-investment, savings and technology change are linked
-investment relies on savings
(Banks)
-no savings = savings gap

61
Q

Overcoming lack of savings

A

-foreign aid for political gain

62
Q

Absolute poverty

A

Individuals do not have the resources to be able to consume necessities to survive

63
Q

Relative poverty

A

Poverty that is relative to the existing living standerds for the average indervidual

64
Q

Forms of foregin aid?

A

-Grants
-loans
-tied aid

65
Q

Gini coefficient

A

-statistical measure of inequality of income, it’s value ranges from 0, where there is perfect equality of income to 1 where it is highly unequal

66
Q

Trickle down effect

A

The argument that income cascades down the chain of supply

67
Q

Micro finance

A

Refers to loans, savings, insurance and transfers

68
Q

Purposes of taxes:

A

-pay for G
-correct market failure
-manage AD
-redistribution of income

69
Q

Shadow banking

A

-more banking done in less regulated markets

70
Q

Systematic risk

A

Danger of whole banking system collapsing

71
Q

Central banks roles

A

Regulate financial system to avoid systematic risk

72
Q

Financial market

A

Where buyers and sellers trade monetary services or assets

73
Q

Purposes of financial markets

A

-to provide services demanded by households, firms and government
-speculation and financial l gain

74
Q

Roles of financial markets

A

-savings
-lending
-exchange of goods and services
-insurance

75
Q

Types of financial institutions

A

-investment bank
-retail bank-consumers
-commercial bank-firms

76
Q

Scalping

A

Small profits on small price changes through a day

77
Q

Financial market failure
(Asymmetric information)

A

-financial institutions have more knowledge then consumers
-PPI for non needed products
E.g toaster

78
Q

Financial market failure
(Market rigging)

A

-when a group of individuals collude to fix prices to lead to gains at the expense of others
-Elon musk tweeting about Tesla so he could buy up shares

79
Q

Financial market failure
(Externalities)

A

-these costs are taken on by firms,consumers and the government but not the financial market
-Uk gov bailed out banks
-cost uk tax payer loads

80
Q

Types of development strategy
-market orientated

A

-trade liberalisation
-promotion of FDI
-privatisation

81
Q

Negatives of subsides

A

-subsides can be corrupt
-can be difficult to remove
-if subsidy is bought by everyone it benefits the rich who don’t need it

82
Q

Types of development strategy
-interventionist

A

-lnfrastructure development
-tourism
-Lewis model
-development of primary industry’s

83
Q

Roles of forward market

A

-access to defferd payments for currency’s

84
Q

Equity

A
  • fair distribution of income
85
Q

Equality

A

-equal distribution of income

86
Q

Automatic stabilisers

A

-progressive income tax system
-benefits

87
Q

Crowding out

A

-government increase spending, increasing AD which leads to hight inflation and interest rates
-reducing private sector investment

88
Q

Crowding in

A

The theory that suggests that an increase in government spending can lead to increase in private investment

89
Q

Intrested rates right now?
(Monetary)

A

4.5%
-and Quantitive tightening

90
Q

Budget deficit

A

6.1% GDP
-2023 116 Billion on debt interest alone
-more then public services other then NHS

91
Q

Income tax and corporation tax right now?
(Fiscal)

A

-Income tax has been frozen
-corporation tax 19%-25%

92
Q

Fiscal drag

A

Incomes rise with inflation but income tax bracket doesn’t

93
Q

SR changes in TOT

A

-demand/supply of exports/imports
-relative inflation rates
-exchange rate movements

94
Q

LR changes in the TOT

A

-income
-technology
-productivity

95
Q

Structural trade deficit

A

-supply side issues such as low productivity, investment or high unit labour costs

96
Q

Cyclical deficit

A

Part of the fiscal deficit which is caused by government spending and taxes changing through trade cycle

97
Q

Structural deficit

A

Part of a fiscal deficit that exists even when the cyclical deficit is zero at the top of a boom

Econmics (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions