globalisation and trade Flashcards
Globalisation
The process of increasing economic integration of the world’s economies
World Trade organisation
An international body whose parkours is to promote free trade by persuading countries to abolish Import tariffs and other barriers to trade. As such it has become closely associated with globalisation
Multinational corporations
Enterprises operating in several countries but with their headquarters in one country
Less developed economies
Country is considered behind in terms of their economy, human capital, infastructure and industrial base
(Economies with low income per capita and less development in terms of human capital and infrastructure)
More developed economies
Countries with a high degree of economic development, high average income per head, high standards of living, usually a service industries dominating manufacturing and investment having taken place over many years in human capital and infrastructure
European Union
An economic and partially political union established in 1993. It developed as a more closely integrated organisation from the European Union community. The EU has expanded to include 27 countries
Containerisation
The use of uniform sized containers for transportation of goods which significantly reduces the cost of transport through increased efficiency
Outsourcing
Part of a thumbs production is performed by another firm
Absolute advantage
The country has absolute advantage if it can produce more of a good than other countries from the same amount of resources
Comparative advantage
This is measured in terms of opportunity cost, the country with the least opportunity cost when producing a good possesses a comparative advantage in that good
Tariff
A tax on imported goods and services
Protectionism
Implementing policies to protect an economy through reductions on imports
Custom unions
A customs union is an agreement between two or more neighboring countries to remove trade barriers, reduce or abolish customs duty, and eliminate quotas.
Not as closely integrated as a single or common market
The country is joined together to eliminate all trade barriers but are not able to trade freely with countries outside of the Customs Union
Single Or common market
Deep integration common prices regulation free movement of labour capital for example someone working in Spain is able to freely go and work in France
Economic integration
Process whereby countries coordinate to reduce trade barriers and to harmonise monetary and fiscal policy
Trading bloc
A group of countries that join together and agree to increase trade between themselves
Bilateral or multilateral trade agreements
Agreement to reduce tariffs and quotas between two or multiple countries
Economic and Monetary Union
Same currency same central bank same monetary policy for example eurozone
Absolute advantage
When an economy is able to produce greater quantify of out put with the same amount of Input
Comparative advantage
When an economy is able to produce a greater
Quantity of output at a lower opportunity cost
Economics development
Assessing the standards of living and economic welfare of those in a country
Quota
A limit in the amount of a good that can be imported in to a country
Trade creation
Creation of trade between members with in a bloc
Trade diversion
Diversion of trade between. Country in a bloc and efficiency countries out side a bloc to less efficient countries with in a bloc
Trade liberalisation
Reduction or removal or protectionist policies
WTO
international organisation that aims to make trade as free as possible discussing trade a few ends and sets f trade disputes
